KONTAN.CO.ID - BEIJING. China's auto sales fell again in March but the pace of decline was the smallest in seven months, industry data showed, as car makers reduced retail prices to boost business after Beijing handed out tax cuts to spur consumer spending. Sales fell 5.2 percent from a year ago to 2.52 million vehicles, the China Association of Automobile Manufacturers (CAAM) said on Friday, marking the ninth straight month of decline in the world's largest auto market. But this was the smallest drop since August 2018. "We saw a warmer recovery in March. We are optimistic and hope to see the turning point appear in around July and August" said Xu Haidong, assistant secretary general at CAAM, the country's biggest auto industry association.
Recent government cuts to value-added tax (VAT) are expected to further benefit car sales, Xu added. "The VAT cut can drive production and employment, so an effective implementation of the policy can bring warmth to the market." China has cut VAT for the manufacturing sector to 13 percent from 16 percent, prompting some car makers such as BMW and Mercedes-Benz to lower prices. "We expect China's auto market to see positive growth in the third quarter and a relatively large increase in the fourth," said Alan Kang, Shanghai-based analyst at LMC Automotive. In 2018, China's car market hit reverse for the first time since the 1990s against a backdrop of slowing economic growth and a crippling Sino-U.S. trade war.
