China Auto Sales In April Rise As Dealers Offer Discounts

Over 1.7 million passenger vehicles were sold in China during April, an increase of 6.4 percent compared to the same month last year, according to data released Tuesday by China Passenger Car Association. The combined sales of sedans, minivans, SUVs and multipurpose vehicles (MPV), however, fell 10.8 percent from March, when 1.9 million vehicles were sold.

The total number of vehicles sold in the January-April period this year crossed 7.35 million, a 6.7 percent rise over the same four months in 2015, the data showed.

Sales in April fell in all categories, compared to March, with MPVs taking the biggest hit of 21.6 percent. However, the only category to see a decline from April last year was sedans, whose sales fell by 4.5 percent on a year-on-year basis.

Auto sales are typically a good indicator of consumer spending, but the numbers for April are a mixed bag at best.

While the year-on-year increase is encouraging, the fall in sales from March shows consumer spending is still erratic. It is made somewhat more problematic by the fact that car dealers in the world’s second-biggest economy offered discounts that averaged about 18 percent off the manufacturer’s recommended selling price, as reported by Bloomberg, citing Bank of America Merrill Lynch estimates.

Steve Man, a Hong Kong-based auto industry analyst for Bloomberg Intelligence, said: “Many car buyers in China have been accustomed to incentives. Automakers are also using marketing ploys like rebates and cheap financing to lure consumers into the showrooms and buy new cars.”

Inventory levels at automobile dealers remain above levels considered healthy for eight consecutive months.