Chinese auto sales weaken in January as sales tax rises

At Miller Toyota of Anaheim, a large inventory of Avalon and Camry models sits on the lot Wednesday but the dealership was unable to sell any of the cars until a recall issue is resolved. Toyota last week said that it would recall 2.3 million of its vehicles due to an issue that can cause the gas to stick and cause the vehicle to accelerate uncontrollably. ///ADDITIONAL INFO: -Photos taken 01/27/10- BRUCE CHAMBERS, THE ORANGE COUNTY REGISTER - ORANGE - Toyota last week said that it would recall 2.3 million of its vehicles due to an issue that can cause the gas to stick and cause the vehicle to accelerate uncontrollably. Furthermore, last night the Torrance-based U.S. arm of the Japanese automaker said that it would take the unprecedented step of actually halting sales of the vehicles. Again, the vehicles being recalled and now not for sale on U.S. dealer lots are: * 2009-2010 RAV4, * 2009-2010 Corolla, * 2009-2010 Matrix, * 2005-2010 Avalon, * Certain 2007-2010 Camry, * 2010 Hig

 

BEIJING / AP

China’s auto sales shrank in January following a sales tax increase, an industry group reported on Monday. Sales in the world’s biggest auto market declined 1.1 percent from a year earlier to 2.2 million, compared to December’s 9.1 percent expansion, according to the China Association of Automobile Manufacturers. Total vehicle sales, including trucks and buses, rose 0.2 percent from a year ago to 2.5 million.
China’s auto sales rose 15 percent last year after Beijing cut in half a 10 percent sales tax on small-engine vehicles. The government restored part of that reduction in January, raising the tax from 5 percent to 7.5 percent.
Demand for SUVs helped to offset weakness in sedan sales. SUV sales rose 10.5 percent in January to 881,000, while sedan sales shrank 3 percent to 1.1 million, according to CAAM. Sales of lower-priced Chinese brand SUVs rose 15.2 percent to 543,000.
China’s trade figures can be distorted by the Lunar New Year holiday, which falls at different times in January and February each year. This year, the two-week holiday began Jan. 27, depressing retail activity in January, while last year’s break didn’t begin until Feb. 7.
“January was an unusual month with the earlier timing of the Chinese New Year holiday and the impact of the reduced tax incentive,” Ford Motor Co.’s vice president for sales, Peter Fleet, said in a statement last week.
General Motors Co. reported earlier that January sales of GM-brand vehicles by the company and its Chinese partners fell 24 percent to 321,264. It blamed the Lunar New Year sales lull. Ford Motor Co. said its sales were off 32 percent at 88,432 vehicles.
BMW AG, Europe’s biggest luxury brand, said sales of BMW- and Mini-brand vehicles rose 18.2 percent to 51,345, exceeding 50,000 for the first time. Nissan Motor Co., the most popular Japanese brand in China, said sales declined 6.2 percent from a year earlier to 119,411 vehicles. Toyota Motor Co. said its sales rose 8.1 percent to 101,800.

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