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Sales ebb for foreign autos
By Jin Jing 2007-7-6

SALES growth for the Chinese units of overseas car makers has slowed as the market moves toward maturity and domestic manufacturers reel in buyers, the latest figures show.

Volkswagen Group China raised sales 25 percent to 431,369 vehicles in the first six months on the Chinese mainland and in Hong Kong, down 30 percent from the previous year, according to a company statement.

General Motors Corp's major passenger car maker in China, Shanghai General Motors Corp, reported 12 percent sales growth to 225,502 units in the period, compared with 49 percent in the first half of last year and 32 percent for all of 2006.

Ford Motor Co said its first-half sales in China rose 25 percent to 93,206 vehicles after a 102 percent spurt last year.

"The rapidly expanding number of vehicles following two years of growth has lead to a more mature Chinese auto market that will exhibit more moderate growth," said Lang Xuehong, director of the automotive division of Sinotrust, a specialized auto consultancy.

Passenger car sales reached 5.17 million last year in China, a 30-percent surge that made it the world's second-largest auto market after the United States.

The China Association of Automobile Manufacturers earlier cut its forecast for market growth to 20 percent for this year.

The industry has experienced an annual growth rate of more than 25 percent over the past two years after it recovered from tight macro controls and frequent price wars in 2004 that dampened car sales.

"Leading foreign auto makers are also facing challenges from their faster-expanding domestic rivals despite their smaller sales scales," Lang said.

Chinese car makers including Chery Automobile Co Ltd and Brilliance Automotive Group are attracting buyer by selling cost-competitive vehicles with improved technologies.

Those manufacturers are also gaining from their rapidly expanding exports.

Brilliance Group's half-year sales, for instance, increased 58.1 percent to 146,000 units.

Chinese car makers held a 30-percent market share over the first five months of the year, up from 22 percent in 2005.

Shanghai Daily
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