The Chinese passenger-car market returned to growth in June, raising hopes that the world's biggest auto market is gaining momentum after a tepid start to the year.
Passenger-car sales--which suffered their biggest drop in two years over April and May--rose by 2.3% to 1.83 million last month, the government-backed China Association of Automobile Manufacturers said Tuesday.
The gain suggests that the impact of an auto-sales tax increase at the start of the year has faded, according to analysts. Demand, which rose in the months before the higher rate was levied, declined after it came into effect. The tax rate rose to 7.5% from 5% last year.
Total vehicle sales increased by 4.5% year over year to 2.17 million in June, and by 3.8% to 13.35 million in the first half of the year.
Despite last month's strong performance, passenger-car sales increased by only 1.6% to 11.25 million in the first half, weighed down by weak sedan sales, which declined 3.2%. However, the popularity of sport-utility vehicles, whose sales rose 16.8% in the period, helped to ensure the passenger segment delivered growth over all.
Sales of commercial vehicles, such as vans and trucks, were notably strong in the first half, rising 17.4% to 2.1 million.
-Lilian Lin contributed to this article
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(END) Dow Jones Newswires
July 11, 2017 03:00 ET (07:00 GMT)