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China's 2012 auto sales rise 7.1 per cent after purchases accelerate in December

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BEIJING, China - China's auto sales rose 7.1 per cent in 2012 after growth accelerated in December as an economic recovery began to gain traction, an industry group reported Friday.

Sales in the world's biggest market by number of vehicles sold totalled 15.5 million units, the China Association of Auto Manufacturers said. December sales rose 6.9 per cent to 1.46 million vehicles.

Global automakers are looking to China to drive revenues amid weakness elsewhere. But last year's growth was hampered by an economic slump and ownership restrictions imposed by some cities to curb traffic and smog.

Full-year growth was healthy even though it came in below the CAAM's earlier forecast of 8 per cent, said Zhang Xin, an industry analyst for Guotai Jun'an Securities in Beijing.

"The purchasing power of Chinese auto customers is pretty good," said Zhang. "Growth in 2013 could be even better, even without any stimulus. And the new government also is advocating expanding domestic demand."

The communist government is promoting auto manufacturing and ownership but has tried to fine-tune policies to encourage sales of smaller, more fuel-efficient vehicles. General Motors Co., Nissan Motor Co. and Daimler AG's Mercedes-Benz have launched lower-priced Chinese brands for the vast but poor rural market.

Sales that racked up monthly double digit increases in the first half of the year decelerated as China's economic growth slowed to a three-year low of 7.4 per cent in the three months ended in September. Sales growth declined steadily from June's 15.8 per cent to 11 per cent in July before bottoming out at 3.7 per cent in August.

As for China's new but ambitious domestic automakers, sales rose 6.1 per cent to 6.5 million vehicles, meaning they lost market share to global rivals, the association said. Their share of the passenger car market declined 0.4 percentage point from 2011 to 41.9 per cent.

"They are hurt more by foreign brands than by local or the newly created local ones," said Zhang. "Competition in the future will be stronger and stronger, for sure."

Total vehicle sales including trucks and buses rose 7.1 per cent in December to 1.8 million vehicles, according to the CAAM. For the year, sales rose 4.3 per cent to 19.3 million vehicles.

Also Friday, the Chinese government released a forecast that total vehicle sales should rise to 20.8 million this year.

Among global automakers, Ford Motor Co. said earlier sales of Ford brand vehicles in China rose 21 per cent in 2012 to 626,616 vehicles. It said December sales rose 43 per cent from a year earlier to 70,510.

Sales of Japanese brands were hurt by tensions between Beijing and Tokyo over disputed islands in the East China Sea, which kept buyers away from the showrooms of Japanese autos.

Nissan said its 2012 sales fell 5.3 per cent to 1.18 million vehicles but beat its forecast of 1.175 million. It said December sales of 90,400 vehicles showed a "continuing recovery trend" over November but gave no details.

Daimler said Chinese sales of its Mercedes-Benz, Smart, AMG and Maybach brands rose 4 per cent over 2011 to 206,150 vehicles.

___

AP researcher Fu Ting in Shanghai contributed.

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