China Sep auto sales slowest in 19 months

Slump in commercial cars restricts growth despite rise in passenger vehicles

China's auto sales rose 2.5 percent in September from a year earlier, its slowest pace in 19 months, dragged down by sluggish sales of commercial vehicles such as trucks, an industry association said on Monday.

Vehicle sales totaled 1.98 million units in September, the China Association of Automobile Manufacturers (CAAM) said at a press conference in Beijing.

The CAAM attributed the slowdown to sluggish sales of commercial cars. Passenger vehicle sales rose 6.4 percent in the month while commercial vehicle sales slumped 16 percent during the period.

Although the CAAM cited rising seasonal demand from the traditionally slow summer months, it added year-on-year growth was "relatively low" in September.

During the first nine months of 2014, China's vehicle sales rose 7.0 percent from a year earlier, according to CAAM data.

The CAAM has forecast that the market will expand 8.3 percent this year, slowing from last year's 13.9 percent pace.

"China already has a huge auto market, and with more cities expected to restrict auto sales to fight pollution, it is natural for growth to slow down," said Li Xiangfeng, an analyst at Shanghai-based consultancy ISE.

"The market cannot grow at a double-digit pace forever," he said.

Sales of major Japanese carmakers continued to be bearish in September. Nissan Motor Co and Honda Motor Co both posted their third consecutive monthly decline in China sales, registering decreases of 20 percent and 23 percent respectively.

Nissan attributed the decline to sluggish sales of commercial vehicles and increased competition while Honda said dealers had been clearing inventory ahead of the launch of two new models later this year.

On the other hand, sales of German brands have continued to be robust.

Premium-car maker BMW posted a 17.9 percent growth during the first nine months while Daimler AG's Mercedes Benz said its China sales jumped 30.5 percent in September. Volkswagen AG's Audi posted a 13 percent increase in sales during the month.

Bucking the broader trend, sales of new-energy cars saw strong growth on the back of government support to the industry.

In the first nine months, a total of 38,163 new-energy cars were sold in China, 2.8 times the volume seen during the same period last year.

China has rolled out a set of measures to promote the use of new-energy vehicles in its bid to save energy and combat pollution, including tax exemptions, subsidies for car purchases and requirement for government organs to buy more new-energy cars.