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Auto output, sales plunge in October 
Last Updated(Beijing Time):2004-11-16 09:51

Both automobile output and sales in China plunged in October from the previous month after consecutive growth in August and September, according to an industry monitoring organization.

Vehicle output and sales stood at 374,300 units and 404,700 units last month respectively, down 14.47 per cent and 7.83 per cent from September, statistics from the China Association of Automobile Manufacturers indicated.

The drop came after growth of 15.93 per cent and 14.37 per cent recorded in September over the previous month.

"The plunge mainly resulted from manufacturers' cuts in production to ease inventories and the one-week National Day break (from October 1 to 7)," Zhu Yiping, the auto association's spokeswoman, told China Daily yesterday.

Domestic vehicle demand declined over four consecutive months from April to July of after peaking in March, leaving huge production inventories and at dealerships.

Among three main types of vehicles, passenger cars reported the biggest decline. Sedans saw a drop of 19.77 per cent in October to 147,100 units with sales down 7.99 per cent to 178,600 units.

Sales of buses saw a substantial decrease of 9.67 per cent to 93,100 units with output dropping 8.12 per cent to 93,200 units.

Truck output amounted to 134,100 units, with sales of 133,100 units in October, down 12.34 per cent and 6.77 per cent, respectively.

However, accumulated vehicle output and sales grew by 17.58 per cent and 17.59 per cent year-on-year to 4.23 million units and 4.13 million units during the first 10 months of this year.

Growth was down from 19.28 per cent and 18.76 per cent in the first nine months of this year, and from more than 30 per cent last year.

Passenger car output and sales rose by 18.44 per cent and 18.76 per cent to 1.95 million units and 1.88 million units from January to October this year.

Truck output and sales reached 1.27 million units and 1.26 million units during the period, up 22.75 per cent and 25.70 per cent from a year earlier.

Bus output increased by 10.26 per cent to 1.01 million units during the period with sales growing 6.87 per cent to 993,700 units.

"We believe both vehicle output and sales will top 5 million units this year, although growth in the first 10 months was much lower than last year," Zhu said.

Last year, vehicle output and sales stood at around 4.4 million units.

But analysts and dealers are pessimistic about conditions during the remaining period of this year due to a slew of negative factors, such as the government's controls on car loans and interest rate hikes, skyrocketing oil prices and customers' persistent delays in making car purchases due to strong expectations that further car price cuts could occur next year.

"Both domestic vehicle output and sales will continue to decline in November, and a market rebound at the end of the year should not be expected," said Su Hui, general manager of the Beijing Asian Games Village Automobile Exchange, the biggest passenger car market in Beijing.

China will remove quotas and cut tariffs on auto imports to 30 per cent next year from the present 34.2-37.6 per cent in line with its commitments to the World Trade Organization.

The tariff will be cut to 25 per cent by the middle of 2006.

Source:China Daily 
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