According to the China Association of Automobile Manufacturers (CAAM) vehicle sales in China were up 14.5% on the same period last year to stand at 640,000 units. Growth was propelled in particular by price cuts on passenger cars. CAAM says that Q1 sales of passenger cars increased by 23.2% to 191,300 units.
Despite the increase in sales, the price cuts resulted in an 11% decline in profits for China’s 15 major domestic automobile manufacturers according to figures issued by the State Economic and Trade Commission.
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China cut the car import tariffs from 100% to between 70% and 80% early last year. The government cut tariffs further this year by about one-third to 40-50%.
This year has also seen big price cuts by several leading local carmakers led by Xiali and followed by others.
