Greener BeeGreen HolidaysUPDATE 2-China Jan vehicle sales flatline as tax hike, holiday …


* Jan vehicle sales edge up 0.2 pct y/y

* Weakest growth in almost a year

* Hit by tax cut rollback, new year holiday

* Jan NEV sales down 74.4 pct y/y

(Adds official comments and details on NEV sales)

BEIJING, Feb 13 China vehicles sales in January
grew at their slowest pace in almost a year, an industry
association said on Monday, as a tax cut on small-engine
vehicles was rolled back and the Lunar New Year holidays weighed
on demand.

Auto sales in China, the world’s largest car market, edged
up 0.2 percent in January from a year earlier to 2.52 million
vehicles, the China Association of Automobile Manufacturers
(CAAM) said, the weakest since February 2016.

That compares with a 9.5 percent increase in December and a
16.6 percent rise in November.

Chen Shihua, a CAAM spokesman, told reporters in Beijing the
national holiday period and a decision to raise taxes on
small-engine vehicles had hit monthly sales.

Global automakers reported a slower rate of sales in China
in January, citing fewer working days with the Lunar New Year
holidays and tax hike on cars with engines of 1.6 litres or
below.

“Many Chinese consumers in anticipation of a tax hike had
placed their car orders by 2016-end,” said Jing Yang,
Shanghai-based analyst at Fitch Ratings.

Last month, the association said it expects China vehicle
sales to grow 5 percent in 2017, a marked slowdown from a 13.7
percent rise last year, which was supported by a deeper tax cut
on small-engine cars.

NEV SALES SKID

Sales growth for battery electric and plug-in hybrid cars
also plunged in January as Beijing requires all automakers to
re-apply for their models to receive subsidies under a stricter
regime following allegations of subsidy cheating.

There was a steep 74.4 percent fall in sales of new energy
vehicles (NEVs) in January, compared with a rise of 53 percent
last year, according to CAAM. China NEVs sales are likely to be
between 700,000 vehicles and 800,000 vehicles this year, it
added.

Last month, China released a list of “recommended” green
energy vehicles, paving the way for 185 car models to receive
government subsidies. Beijing published five lists last year,
giving the green light to 2,193 car models.

“Factory owners can’t sell cars they have now as they are
not on the list, and are worried they won’t get the subsidies
either,” said Xu Haidong, CAAM’s assistant secretary general.

“This has had an impact on new energy vehicles’ sales and is
the reason behind the big drop-off.”

Beijing has spent billions of dollars to promote electric
and plug-in hybrid cars to help the domestic auto industry take
on global rivals.

(Reporting by Qiu Yifan and Jake Spring; Writing by Adam
Jourdan; Editing by Stephen Coates and Sherry Jacob-Phillips)


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