Retail in Asia

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China auto sales rising most in 17 months

China Motor Vehicle Sales - Retail in Asia

As General Motors Co. (IW 1000/3) and Guangzhou Automobile Group Co. boosted deliveries and dealers offering discounts helped clear inventories in the world’s biggest auto market, China’s passenger-vehicle sales accelerated the most in 17 months.

Retail sales of cars, sport utility and multipurpose vehicles climbed 23% to 1.6 million units in July, the biggest monthly percentage gain since February 2015, according to the China Passenger Car Association. Deliveries increased to 12.4 million units in the seven months through July.

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A gauge of inventory levels fell to an 11-month low and indicated contraction for the first time in that span, the China Automobile Dealer Association said. Keeping supplies in check is typically an indication carmakers can maintain pricing and production.

The government’s purchase-tax cut on vehicles with smaller engines has helped drive demand for compact and mid-size SUVs. With increasingly affluent Chinese buyers opting for more spacious vehicles, SUVs sales grew 45% in July, outpacing the 15%  expansion for sedan models.

Chinese consumers are picking SUVs over sedans as the selection of products to choose from has grown, according to Man. Pricing competition is intensifying in the sedan segment, driving down inventory levels, he said.

(Source: Industry Week)