China overtakes US as world’s largest car market
General Motors has estimated that China sold 790,000 vehicles in January, surpassing the United States, where sales tumbled 37 percent from a year ago to 656,976 vehicles.
The leading US automaker further predicts that Chinese auto sales could hit 10.7 million vehicles this year, nearly a million units more than its estimate of 9.8 million for the same period in the US.
Although auto sales have slowed in recent months, China remains world's only major auto market with strong potential given strong domestic demand and recent government policies.
The government passed a stimulus package for the auto sector last month, reducing the purchase tax on vehicles with engine capacity of less than 1.6 litres by half, to 5 percent.
It is also spending RMB 5 billion on subsidies to rural residents who trade in old vehicles for vehicles 1.3 litres or less.
Automobile shares gained 5.90 percent on average. Anhui Jianghuai Automobile Co. (600418,SH), Beiqi Foton Motor Co.(600166,SH) and four other automakers surged to their 10 percent trading caps.
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