Auto industry expected to grow faster in H2

Xinhua, July 17, 2011

The growth of China's auto sector will quicken in the second half of the year, according to top auto makers and experts at an auto expo in the northeastern province of Jilin.

The government may implement favorable policies to boost the market and ensure sound development after the growth rate of both auto sales and output slowed in the first half of the year, said Yu Tiantian, researcher with Jilin North Automobile Industry Information Development Co., Ltd., while attending the eighth China Changchun Automobile Expo, on Saturday.

"The government is studying new polices to boost auto consumption," Yu said.

Auto sales in the first half of the year reached 9.23 million units, up 3.25 percent year-on-year. But the growth rate was 29 percentage points lower than that of last year. The output only rose 2.48 percent to 9.16 million units during the period, according to data from the China Association of Automobile Manufacturers (CAAM).

The decrease, caused by the removal of tax incentives for car purchases, rising fuel costs, purchase limits in some cities and tight money supply, will be eased later this year, said Chen Fangming, director of Public Relations with Zhejiang Geely Holding Group.

"What policy the government adopts has become a dominating factor for the ups and downs in the auto market," Chen said.

Industry heavyweights and experts attending the auto show said they were optimistic about future growth.

"Despite the drop in sales during the first half, we are still confident about the market as the government moves to adjust its policies," said Xu Yulin, vice president with the Guangzhou-based GAC Motor.