The Canadian Press - ONLINE EDITION

China auto sales growth slows to 9.7 per cent in July as local brands outpaced by global rivals

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BEIJING, China - China's auto sales decelerated further in July while global automakers continued to mop up the market share of local brands, industry figures showed Friday.

Sales rose 9.7 per cent to 1.3 million vehicles, according to the China Association of Automobile Manufacturers. That was down from June's 11.5 per cent growth and May's 13.9 per cent.

Total vehicle sales in the world's biggest auto market rose 6.7 per cent over a year earlier to 1.6 million vehicles.

Global automakers see China as crucial to their future and are spending heavily to develop models for local tastes. That is squeezing China's fledgling auto brands, which are growing but steadily losing market share to foreign rivals.

Sales by Chinese brands rose by a relatively robust 7.7 per cent in July, CAAM said. But sales by German, Japanese, American and Korean brands soared 30.9 per cent, 21 per cent, 18.4 per cent and 12.5 per cent, respectively.

The standout vehicle category was sport utility vehicles. CAAM said sales rose 35.3 per cent in the first seven months of the year, though it gave no figure for total sales.

Earlier, General Motors Co. reported sales of GM brand vehicles by the company and its Chinese partners rose 12.7 per cent over the same month in 2013 to 249,734. Ford Motor Co. said sales rose 25 per cent to 90,775 vehicles.

Nissan Motor Co. said July sales declined 12.3 per cent from a year earlier to 79,500 but said year-to-date sales rose 10.7 per cent to 699,900. Toyota Motor Corp. said July sales rose 99 per cent to 74,800 vehicles.

Meanwhile, a group of global luxury automakers are under investigation by Chinese anti-monopoly regulators. Authorities have not disclosed the basis of the probe but analysts suggest they might have been prompted by complaints that imported luxury vehicles are too expensive and automakers abuse their control over supplies of replacement parts to charge excessively high prices.

Audi, Mercedes, Chrysler and BMW have announced price cuts of up to 38 per cent for vehicles or replacement parts. Lower prices might make the foreign brands even more attractive to buyers, further ratcheting up pressure on Chinese producers.

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China Association of Automobile Manufacturers (in Chinese): www.caam.org.cn

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