China auto sales in first rise for 6 months

Auto sales in China edged up in September from a year ago, snapping a five-month falling streak in the world's largest car market, an industry group said Tuesday.

Vehicle sales in the country began dropping in April as the world's second-largest economy lost steam and consumer income growth slowed, battering demand for new cars.

But a total of 2.02 million cars were sold in September, up 2.08 percent from a year ago, the China Association of Automobile Manufacturers said in a statement.

The increase was mainly driven by demand for sport utility vehicles, which saw sales surge 58.79 percent year-on-year to more than 566,000 units, CAAM added.

Total sales soared 21.60 percent compared to August, it said, without explanation.

In an attempt to support the auto sector, the State Council, China's cabinet, cut purchase taxes by half on passenger cars with small engines from the start of this month.

The move restored an incentive first imposed in 2009 during the global financial crisis that was withdrawn two years later.

"With the efforts of the entire industry and... the policy of the State Council, it is possible that we can realise three percent growth this year," CAAM secretary general Dong Yang told reporters.

Car producers in the country have been scaling back output this year in the face of shrinking demand, with media reports of unusually long holidays at factories and decreased bonuses and overtime pay for workers.

Production last month dropped 5.64 percent to 1.89 million units, CAAM data showed, the fifth straight month of decline.

Concerns over slowing growth in China, a key driver of global expansion and a vital market, have sent world stock exchanges into turmoil in recent months.

Chinese growth hit a 24-year low of 7.3 percent in 2014 and has slowed further this year, with gross domestic product increasing 7.0 percent in each of the first two quarters.

Car plate restrictions in some major cities to ease traffic gridlock and volatility on China's own stock exchanges have also hit demand.

China's overall auto sales reached 23.49 million vehicles last year, jumping 6.9 percent from 2013 but falling short of CAAM's growth target of 8.3 percent.

In the first nine months of the year, sales increased a marginal 0.31 percent to 17.06 million units, the CAAM statement said.