China auto sales rise 18.3 percent in December

The implementation of a tax break on automobile sales has led to growth in the industry in 2015, although the rise was not as significant as expected.

New vehicle sales in China jumped by 15.4% to 2.8m units in December, from 2.4m units in the same month of previous year, according to data released by the China Association of Automobile Manufacturers.

The tumult of the stock market and the slowing pace of the economy have forced the auto makers selling in China to report in 2015 the smallest growth in three years, even if the government has intensified its efforts to boost the demand in the last quarter.

Based on the analysis, CAAM also predicted that in 2016 the sales of domestic passenger vehicles will increase 7.8% to be around 22,760,000 units while that of commercial vehicles will see a negative growth of 5%.

Growth a year ago was held back by registration restrictions imposed by city authorities across the country to help limit growth in road congestion and pollution. The overall SUV sales soared 52.4 percent from previous year despite the general cooling of China’s auto market.

Economic growth hit a 24-year low of 7.3% in 2014 and slowed further last year, weakening to 6.9% in the July-September period. Also the 5 percent purchase tax cut for energy-saving vehicles of 1.6-liter engine displacement or less since October kept the sales momentum.

A spectacular rally in Chinese shares in the first half of 2015 attracted huge flows of funds into the stock markets, much of which became locked up in an ensuing rout, hitting consumers’ budgets and dampening demand for cars.