China car sales up on fading tax impact, strong economy

BEIJING • China’s passenger-vehicle sales rose for a third consecutive month in July with General Motors Co (GM) and Nissan Motor Co selling more automobiles as the impact of higher sales tax waned.

Retail sales of cars, SUVs and multipurpose vehicles increased 5.5% to 1.7 million units last month, the China Passenger Car Association said in a statement yesterday.

Deliveries rose 0.6% to 12.5 million units in the first seven months this year, according to the association.

Chinese consumers brought forward car purchases after the government announced it would raise the levy on small-engine cars to 7.5% from 5% from the start of 2017, rolling back a tax cut instituted in 2015.

That weighed on demand in the first-half, when auto sales dropped for the first time in at least 13 years.

The impact started to fade out and is partly offset by discounts automakers and car dealers are offering.

The world’s second-largest economy expanded 6.9% in the second-quarter, faster than expected, putting the nation on track to meet its growth target this year.

Deliveries of GM vehicles in China increased 6.3% in July year-on-year to 287,581 units, thanks to strong demand for its economic Baojun 510 SUV and premium Cadillac cars.

Nissan’s China sales gained 14.2% on year to 104,794 units last month, driven by growth in sales of Sylphy sedans and X-Trail SUVs. — Bloomberg