Unit sales of trucks, buses and passenger cars in China soared 26.3% in August and a further 29% in September — racking up double-digit rates of growth that haven’t been seen in a few years. In fact, September’s jump in car sales was the largest monthly gain since January 2013.
Strong sales performance in the third quarter brought total vehicle sales to 19.4 million for the first nine months of this year, a 13.2% increase from the same period in 2015.
Within the overall numbers, passenger cars increased by 14.8% to 16.8 million units, while trucks, led by a 20.4% increase in sales of heavy-duty trucks, increased by 6.5% to 2.2 million units. SUVs continue to be the single strongest product category with sales surging by 45.9% to 6 million units for the first three quarters of the year.
Strong sales in the third quarter are accounted for, at least in part, by pre-buying in advance of an expected increase in the purchase tax on small cars at year-end.
In order to stimulate sluggish car sales last year, China cut the purchase tax on cars with engines of 1.6 litres or less in October 2015 — from 10% to 5%. It is widely expected that the government will increase the purchase tax to at least 7.5% at year-end and consumers expecting to buy a car within the next 12 months understandably want to take advantage of the lower tax rate.