China 2009 Vehicle Sales May Rise 28% on Stimulus, Pass U.S.
Sept. 5 (Bloomberg) -- China's vehicle sales may rise 28 percent this
year, according to the nation's top planning agency, likely enough
for the country to surpass the U.S. as the world's largest auto
Full-year sales may reach as high as 12 million vehicles, Chen Bin,
chief director of the industry coordination department at the National
Development and Reform Commission, said today at a conference in
Tianjin. U.S. sales will likely be around 10.5 million, according to
both General Motors Co. and Ford Motor Co.
China has boosted auto sales this year through tax cuts and subsidies
as a part of a wider 4 trillion yuan ($586 billion) stimulus that has
shielded the country from the worst of the global recession. U.S.
sales have slumped 28 percent, pushing the old GM and Chrysler LLC
"Government incentives have really helped China's auto sales this
year," said Li Chunbo, a Beijing-based analyst with Citic Securities
Co. "There's also still a lot of demand for vehicles in rural
Li added that full-year sales could reach as high as 12.5 million
vehicles. GM, the largest overseas automaker in China, last week
increased its target to as much as 12 million after doubling its own
August sales from a year earlier.
Nationwide sales topped 8 million in the first eight months, NDRC's
Chen said. U.S. sales slumped to 7.1 million as drivers pared spending
amid rising job concerns. Chinese sales of cars, sport-utility
vehicles and other passenger vehicles jumped 71 percent in July to
Second-half sales "will be somewhat better than the first half,"
said Li. He expects stimulus measures to be extended into next year
"because the government has made it clear that the auto industry is
still important for the country."
'Cash for Clunkers'
In the U.S., the government's "cash for clunkers" rebates helped
cause a 1 percent increase in auto sales last month, the first gain
since 2007. Detroit-based GM expects industrywide sales to total 10.5
million this year. Ford's forecast is 10.5 million to 11 million.
Last year's total was 13.2 million, compared with 9.4 million in
The "clunkers" program, which ran from July 27 through Aug. 24,
offered buyers of new, more fuel-efficient vehicles as much as $4,500
for trade-ins of older models.
Automakers and investors are focusing on China as it withstands the
global slump. GM last month agreed to set up a commercial-vehicle
venture with China FAW Group Corp., its third manufacturing deal in
the country. The automaker now runs all operations outside North
America from Shanghai.
Billionaire Warren Buffett has also bought a stake in BYD Co., a
Chinese maker of cars and rechargeable batteries. MidAmerican Energy
Holdings Co., a unit of Buffett's Berkshire Hathaway Inc., wants to
boost its stake further, Wang Chuanfu, BYD's chairman, said on Aug.
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