Vehicle Sales Rally in China -- WSJ

By Trefor Moss Features Dow Jones Newswires

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 14, 2017).

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SHANGHAI -- Vehicle sales in China revved in July, extending a recent rally and further allaying concerns following a dip this spring in the world's biggest car market.

Passenger-car sales were up 4.3% from a year earlier, accelerating from June's 2.3% pace, the government-backed China Association of Automobile Manufacturers said on Friday. There were 1.68 million cars sold. Sales for the first seven months of 2017 were up 2% from the year-earlier period.

U.S. auto makers' sales in China this year have failed to keep pace with the overall market, though, with Ford Motor Co. in particular struggling.

Total vehicle sales in China in July were up 6.2% from a year earlier, at 1.98 million, boosted once again by red-hot demand for commercial vehicles, whose sales rose 18% to 292,800 units. Total vehicle sales for January-July were up 4.1%.

Passenger-car sales had declined in April and May, the biggest drop in two years, but July's strong sales put them on track to achieve the association's forecast of 5% growth this year, said Ye Shengli, the association's deputy chief.

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That would still represent a big drop from last year's 16% -- but that was a growth rate that Mr. Ye said was never realistically going to be matched as the China market matures.

Ford and General Motors Co. both had a disappointing first half of 2017 in China, with sales down 7% and 2.5% respectively compared with the first six months of 2016. They ended the half with strong June sales -- Ford up 15%, GM up 4.3% -- but that turned out to be the start of a rebound only for GM. Its sales in July were up 6.3% from a year earlier, while Ford's were down 7%.

Ford executives had said last month that the company's strong momentum from June put it on course for high single-digit growth in the third quarter. As for the sluggish July, a Ford spokesman said it may have been a hangover from the record-breaking June. He predicted that the release of the EcoSport compact sport-utility vehicle in China later this year will help drive demand, and ruled out offer discounts to draw buyers.

Ford, and to a lesser extent GM, have suffered in China this year from fierce Japanese competition. The Japanese makers' new products -- notably in-demand SUVs -- have chimed with Chinese market trends, said Yale Zhang, managing director of Automotive Foresight.

"They're eating into the sales of Korean and some Western brands," said Mr. Zhang. "Ford does not have enough major new models coming through."

Hyundai Motor Co. said its overseas sales declined in July, dragged down by China, without disclosing its sales numbers in the country. Its sales in China fell 61% from March to June, as tensions rose between China and South Korea over the latter's deployment of an American-made missile defense system.

The Japanese auto makers all posted double-digit sales growth in July: Nissan Motor Co. up 14% from a year earlier, Honda Motor Co. up 12% and Toyota Motor Co. was up 11%.

--Liyan Qi in Beijing contributed to this article.

Write to Trefor Moss at Trefor.Moss@wsj.com

(END) Dow Jones Newswires

August 14, 2017 02:47 ET (06:47 GMT)