China auto sales growth weakens in June amid trade battle

BEIJING (AP) — China’s auto sales decelerated in June, adding to economic pressure on Beijing amid a worsening trade battle with Washington, an industry group reported yesterday.

Sales of SUVs, sedans and minivans rose 2.3 per cent in the most populous auto market, down from May’s 7.9 per cent growth, according to the China Association of Automobile Manufacturers.

That weakness adds to pressure on the economy as growth cools after the government tightened controls on bank lending to curb surging debt.

Beijing cut auto import duties from 25 per cent to 15 per cent, effective July 1. But it has imposed an additional 25 per cent charge on vehicles imported from the United States in a worsening trade conflict with Washington.

SUV sales, usually one of the brightest spots for automakers, contracted by 0.5 per cent from a year earlier to 738,000. Year-to-date sales were up 9.7 per cent at just under five million.

Chinese visitors stand near a glass panel reflecting a Chinese auto brand Lifan X70 SUV on display at the China Auto Show in Beijing. – AP

Demand for sedans rebounded temporarily from a steady decline to rise 9.1 per cent to 963,000. For the first half, sales were up 5.5 per cent at 5.7 million.

Sales of pure-electric and gasoline-electric hybrid vehicles rose 42.9 per cent to 84,000. Year-to-date sales were up 111.5 per cent at 412,000.

On Tuesday, the US electric car maker Tesla announced plans to build its first factory outside the United States in Shanghai.

Tesla would become the first wholly foreign-owned automaker in China following Beijing’s commitment in April to end restrictions that required global producers to work through local partners.

Also this week, Germany’s BMW AG said it will raise the sticker price of US-made SUVs exported to China to reflected the higher import duty.