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Luxury car sales lead the market

By Li Fangfang (China Daily)
Updated: 2008-07-18 09:08

Tang Lei has been busy during the first half of the year, but he is able to find time to enjoy his achievements as the leading salesman in his company, New Beijing Star Automobile Service Co Ltd, a Mercedes-Benz dealer.

"I sold almost 60 Benz vehicles in the first six months, 10 units more than the first half of last year," said the 27-year-old salesman. "I look forward to a better sales in the latter half and expect an annual record in my five-year sales career."

Last week, three German luxury vehicle brands all announced record sales in the Chinese market, outpacing the growth rate of the overall passenger car market of 17.07 percent.

Analysts believe that the growth is fueled by the rumor that the government is set to increase vehicle purchase tax, especially for large-sized vehicles in a bid to address environmental issues.

However, as it is unclear when a tax adjustment would be implemented, analysts said that it is likely that growth will slow for the latter half of the year.

Mercedes-Benz saw its vehicle sales hit 18,000 units for both locally made and imported cars in China, paving the way in the luxury car market with growth of 52 percent year-on-year.

The same day, FAW-Volkswagen Audi sales division in Changchun reported a sales growth of 23 percent compared with the same period of last year, the best half-year sales in its 20-year history in China, with a sales volume of 59,902 units.

Their rival BMW said it had sold a total of 30,325 cars under BMW and Mini brands in China between January and June - a growth of 28 percent compared with the same period of last year.

"Whenever the related policy changes, China's auto market replies with a blazing shock," said independent auto analyst Zhong Shi.

"Being afraid of the rising cost as well as the price after the central government increases the vehicle purchase tax, the dealers will buy vehicles more to deal with the coming pressure," he said.

"And consumers' awareness of buying products ahead of a price hike also boosts sales," said Hui Yumei, an automobile analyst from Sinotrust, a leading domestic auto research firm.

"Undoubtedly the launch of new products is also a factor in driving sales," she added.

Mercedes-Benz has launched more than five new models in China in the first half.