Car sales in China soared almost 84% year on year last month as government incentives continued to fuel an auto boom but analysts see growth cooling in 2010.
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Some 1.02m passenger cars were sold in September, up 83.6% from 552,800 units a year ago, according to the China Association of Automobile Manufacturers.
Geely Automobile Holdings posted record sales of 32,053 cars in September, over double the same month last year and up 40% from August. This brought Geely’s sales for the first nine months of 2009 to 217,334 units, up 42% year on year, it said in a statement.
Earlier today, Ford said its Chinese sales leapt 79% to a record 119,338 units in the third quarter.
China’s largest automaker, SAIC Motor, said its sales were up significantly, growing 47% percent in the first nine months from a year ago.
That followed similar reports in recent days from other industry top players, including Dongfeng Automobile and the Chinese units of General Motors and Volkswagen.
Reuters noted that all had benefited from government policies supporting domestic consumption as part of Beijing’s multi-billion dollar stimulus programme in the global downturn – last January, China’s auto market overtook the United States as the world’s largest, and has been a leading bright spot in the struggling global auto industry this year.
Analysts told the news agency the loose money policies that have propelled the industry are set to continue at least till the end of the year.
“Auto sales rely heavily on policies, just like the stock market. It’s hard to predict [the] sales outlook for next year as we don’t know whether the government would renew the tax cuts for small cars after they expired at the year end,” Orient Securities analyst Qin Xuwen said.
“If they indeed cut sales tax on mid-range sedans next year as many had hoped, it could be another bumper year ahead,” he added.
Changjiang Securities analyst Ji Junfeng said automakers were likely to see sales growth cool down in 2010, regardless of how they ended this year.
“They’re not likely to see a repeat of the explosive year on year growth in car sales in 2010 as the comparative base will be much higher,” he said.
“It’s true that government policies have helped push up auto sales this year, and weak demand in 2008 also played a role in it.”
The strong growth has also turbocharged profits and shares for Chinese automakers, which are required by the Shanghai Stock Exchange to announce if their profits will rise or fall by more than 50% in any given period, Reuters noted.
SAIC did just that, saying on Tuesday its net profit for first nine months of the year jumped more than 70%.
Ford JV partner Chongqing Changan Automobile also said its third quarter net profit was estimated between CNY267.2m (US$39m) and CNY327.2m, reversing last year’s net loss of CNY106.64m.
