China Auto Sales Rose 16% in June, But Slowdown Looms

Honda, Toyota Led Gains as Japanese Carmakers Recovered From 2011 Earthquake Hit

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China's passenger-vehicle sales rose 16% to 1.28 million units in June as automakers increased shipments ahead of scheduled shutdowns for the summer, the China Association of Automobile Manufacturers said today.

Honda Motor Co. and Toyota Motor Corp. led sales gains as Japanese carmakers rebounded from last year's earthquake disruptions. But sales may slow in months to come as China's economy cools, and as municipalities set limits on vehicle registrations to ease traffic gridlock and air pollution. June sales also may have been inflated by automakers that delivered more vehicles to dealerships to meet six-month sales targets, according to UBS.

Last month's growth also may reflect increased shipments before traditional factory shutdowns in July and August for maintenance, CSC International Holdings said.

In the first six months of 2012, passenger-vehicle deliveries gained 7.1% to 7.61 million units, the association said. Total vehicle sales, including trucks and buses, increased 9.9% to 1.58 million units in June. SUV deliveries gained 52%, the best-performing segment.

Vehicle sales will slow in Guangzhou, the capital of Guangdong province that borders Hong Kong, after the southern Chinese city imposed a strict quota on new vehicle registrations this month to control vehicle emissions and ease traffic congestion. Guangzhou -- which followed Beijing, Shanghai and Guiyang with sales curbs -- may not be last. Morgan Stanley said in a July 2 report that 11 other cities, accounting for 15% of total industry sales in 2010, are candidates to implement limits on cars.

In the first five months, passenger-car sales increased 5.5% to 6.33 million units after growth of 6.1% a year earlier. Figures for April, May and June last year were hurt by disruptions from the Japan earthquake. General Motors, China's largest foreign automaker, boosted vehicle sales 10% to 213,495 units, led by demand for its Buick sedans and Wuling microvans. Demand from consumers in China's interior provinces will help sales growth remain steady in the second half of the year, said GM China CEO Kevin Wale.

Ford Motor Co. raised total vehicle sales in China 18% to 52,440 units. First-half deliveries gained 1%. BYD, the Chinese carmaker partly owned by Berkshire Hathaway, sold 12% fewer cars in the first five months, according to industry analyst LMC Automotive. Honda increased deliveries 84% to 64,652 units, with sales and production a year earlier disrupted by the earthquake and tsunami in Japan. Toyota sold 70,500 units in June, 19% more than a year earlier. Nissan Motor Co.'s China sales gained 10% to 119,200 units.

Among luxury carmakers, Audi boosted sales 20% last month to 33,309 units. BMW increased deliveries 13% to 23,930 on the mainland, which excludes Hong Kong. Mercedes-Benz sales in June climbed 2% to 17,250 units.

-- Bloomberg News --

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