China auto sales rise 16% in May

Vehicle sales in China rose 16 percent year-on-year in May to 1.61 million units, according to industry data on Saturday, indicating a strengthening recovery in the world's biggest auto market. In April total vehicle sales rose 5.2 percent to 1.62 million units, although from a higher base. Sales of passenger vehicles accelerated by 22.6 percent year-on-year in May to 1.28 million vehicles, from 12.5 percent in April, according to figures from the China Association of Automobile Manufacturers quoted by Dow Jones Newswires. A total of 6.33 million passenger vehicles were sold in China in the January-May period, up 5.48 percent from a year earlier. For the first five months of the year, total auto sales rose 1.7 percent over the same period last year to 8.02 million units, Xinhua news agency said. China's auto sales slowed sharply in 2011 after the government rolled back incentives and some cities imposed tough restrictions on car numbers to ease chronic traffic congestion and pollution. Last year, vehicle sales rose just 2.5 percent to 18.51 million units in 2011, compared with an increase of more than 32 percent in 2010. Foreign manufacturers in China have generally fared better despite the slowdown, helped by brand recognition and perceptions of higher quality, analysts say. The first foreign manufacturer in China, US auto giant General Motors said Tuesday that its China sales for May surged 21.3 percent year-on-year to hit a record 231,183 vehicles. GM sold more than 2.5 million vehicles in China last year. According to state media, policymakers are considering reviving favourable policies for the auto sector by offering subsidies to buyers of smaller vehicles in rural areas to help boost consumption and spur the economy. The move should particularly benefit Chinese manufacturers, which are strongest in this sector of the market.