The strength of China’s vehicle sales – total vehicles sales rose 18% for the first half year to 6.1m from the same period last year – has surprised car market analysts, government officials and even the country’s carmakers, many of whom are scrambling to produce enough vehicles to meet demand.
Some car dealerships have reported shortages of vehicles and Western carmakers such as Volkswagen and General Motors have had to increase production sharply at their Chinese joint ventures to meet local demand.
Like other sectors of the Chinese economy, car industry growth this year was jump-started by the government‘s January announcement of tax breaks on small cars and subsidies for vehicle purchases in rural areas.
But car segments not targeted by tax breaks or subsidies also saw strong growth in sales, car industry analysts said.
The Financial Times reports that by contrast, the Society of Indian Automobile Manufacturers said car sales in India rose an annual 7.8% in June, while the Moscow-based Association of European Businesses said sales in Russia shrank 56% year-on-year.