China car sales continue to grow despite slowing economy

China Economic Review, August 10, 2012

Sales of passenger cars in China posted strong gains last month, despite the country's slowing economy, Financial Times reported. Passenger car sales increased 11% in July, typically a weak month for the auto industry. The growth of China's car market has slowed dramatically as the auto subsidies introduced as part of the country's 2008 stimulus package expire, but it remains comparatively strong in the face of weakening economic conditions. The sustained expansion of the market has been driven by "continued GDP growth and urbanization which increases the number of middle class consumers that can afford to buy cars,” said Bill Russo, head of Synergistics auto consultancy in Beijing and former head of Chrysler in China. But this hasn't stopped the build-up of dealer inventories in China which could trigger a price war, said Shaun Rein of China Market Research in Shanghai.

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