Car sales in China see modest increase

China has seen a modest rise in car sales in March of 6.5% or 1.35 million units, as the removal of government subsidies for vehicles slowed down sales compared to the year ago period. Jenny Gu, an analyst with J.D. Power and Associates states, “The minivan segment was affected the most after the subsidies were taken away at the end of 2010. I am not expecting a rebound in the near term as there are a lot of mini vehicles out there already after two consecutive years of strong sales.” China has also restricted vehicle use in some cities like Beijing to ease traffic congestion. Some industry experts such as Rao Da, head of the China Passenger Association, suggest that there could be a 10% drop in auto sales for the year. Deputy Secretary General of the China Association of Automobile Manufacturers (CAAM), Xiong Chuanlin, warned of price cuts in the future, as automakers try to reach the ambitious annual sales targets they set at the beginning of the year. (April 10, 2011)