China car sales rise in first two months of the year as economy recovers

BEIJING (AFP) - Car sales in China, the world's top car market, rose in the first two months of the year, indicating strong demand as the country's economy gradually recovers.

A total of 3.39 million vehicles were sold in the country over January and last month, rising 14.7 per cent from the same period last year, the China Association of Automobile Manufacturers (Caam) said in a statement.

"The auto industry had a good start this year, and the overall market demand for cars has remained strong," said the statement.

Giving the figure for the two months reduces seasonal distortions due to the Chinese New Year holiday, which fell in February this year but January last year.

Total car sales declined by around 14 per cent year-on-year to 1.35 million units last month, the Caam said, blaming the week-long holiday for the drop. That came after sales surged 46.4 per cent year-on-year in January, setting a record for any month, thanks to a consumer tradition of spending annual bonuses before the holiday and a low comparative base in the first month of last year.

Sales of passenger vehicles declined by 8.3 per cent year-on-year last month to 1.11 million units, the association said, but over the first two months of the year they jumped 19.5 per cent year-on-year to 2.84 million units.

China's annual car sales rose only 4.3 per cent year-on-year to 19.31 million units last year, hit by limits on numbers imposed by some cities to ease traffic congestion and try to tackle pollution.

A territorial dispute between Beijing and Tokyo that triggered anti-Japanese protests hurt sales of cars made in Japan, but other foreign brands have fared better due to customers' perceptions of higher quality.

The Caam said sales of Japanese passenger cars fell by 17.1 per cent in the January-February period from a year ago, while those of other foreign brands all rose, with German, South Korean and French labels surging over 30 per cent.

Growth in the world's second-largest economy slowed to a 13-year low of 7.8 per cent last year, but a pick-up in the final three months raised hopes for a rebound this year.

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