China sales rise 7.9% in March; GM tops VW in Q1

SHANGHAI -- Sales of passenger vehicles in China gained 7.9 percent last month as consumers purchased cars on concerns that more cities may start limiting new license plates.

Wholesale deliveries climbed to 1.7 million units in March, the state-backed China Association of Automobile Manufacturers said today.

Last year, the association identified eight cities that may impose car purchase restrictions. Two of the cities -- Hangzhou and Tianjin -- have since introduced such measures. Consumers placed orders for 70,000 vehicles in Hangzhou on the day that the eastern city imposed quotas on new license plates, according to the Passenger Car Association, which estimates that panic purchases may boost sales by 500,000 units this year.

"Since last year, there's been fears of ownership restrictions," said Xu Minfeng, Shanghai-based analyst at Central China Securities Holdings. "After Tianjin began restrictions, Hangzhou followed recently. So it's a factor driving up sales."

Among the top automakers, General Motors outsold Volkswagen AG in China for the first time in four quarters, regaining the lead among foreign carmakers in China.

GM's deliveries in China rose 13 percent from a year earlier to 919,114 vehicles from January through March, edging out the 880,700 units sold by Volkswagen, according to figures from the companies. VW, whose sales rose 14 percent in the first three months, counts Hong Kong in its tally.

Total vehicle sales in China, including buses and trucks, climbed 6.6 percent to 2.2 million units last month. For the first three months, deliveries climbed 9.2 percent to 5.9 million units.

Domestic meltdown

China's domestic brands accounted for 39.3 percent of industry sales, declining for a seventh consecutive month, according to the association.

"The decline exposes the weak competitiveness of local brands and I believe it will last for a while," said CAAM Secretary General Dong Yang at a briefing in Beijing Friday. "The time for local brands to engage in hand-to-hand combat with foreign brands has really started and the outlook isn't optimistic."

The Passenger Car Association, a separate trade organization that tracks vehicle sales, released figures on April 8 showing retail deliveries of cars, multipurpose vehicles and SUVs climbed 9 percent to 1.6 million units last month.

Among foreign automakers, Ford Motor Co. is closing in on Nissan Motor Co. and Hyundai Motor Co. after passing Toyota Motor Corp. for the first time last year.

Ford's China deliveries surged 45 percent in the first quarter to 271,321 vehicles, according to figures reported by the companies this month. Toyota boosted March deliveries 19 percent to 90,400 units.

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