In February 2011, sales in China of carmakers such as Toyota Motor Corp., General Motors Co. and Honda Motor Co. were at their slowest pace in over two years as the government ended incentives and the demand fell due to a national holiday that lasted a week.
The China Association of Automobile Manufacturers said that wholesale of passenger cars in China, including sport utility and multi-purpose vehicles increased 2.6 percent from February 2010 to 967,200 units in February 2011 – the country’s slowest since January 2009, when car purchases dropped 7.8 percent.
Their deliveries slowed after China reinstated a 10 percent sales-tax rate on small cars in 2011 and phased out subsidies for vehicle trade-ins in rural areas.
In 2010, overall auto sales increased 32 percent to a record 18.06 million, helping China remain as the world’s largest vehicle market for the second year running.
According to industry analysts at Booz & Co. and Nomura Holdings Inc., the timing of China’s Lunar New Year holidays and lower incentives added to the slowdown.
Bill Russo, a Beijing-based senior adviser at Booz, said that car-buying peaks just before the holiday, as Chinese consumers like to display their shiny new autos to their families over the holidays. He said that the holidays started on Feb. 3, 2011, primarily boosting January 2011 sales, compared with Feb. 14, 2010, which aided that month’s sales. [via bloomberg]