China to see sluggish auto market in second half

The sluggish auto market performance may continue in the second half of this year, despite the Chinese government’s subsidy for the purchase of energy-saving cars. A month after implementation of the subsidy policy, granting a one-off 3,000 yuan (US$441) subsidy for the purchase of every gasoline or diesel-fueled passenger vehicle that has a displacement of less than 1.6 liters and whose general fuel consumption is about 20% lower than the existing standard, the auto markets performance was still slack. In view of the slack sales and rising inventories, auto distributors have begun to cut auto prices to attract more customers. (August 17, 2010)