Car sales rise over the holidays
(Shanghai Daily)
Updated: 2006-02-06 11:38

China's automakers reported sales growth of 20 percent to 50 percent during the Spring Festival holiday compared with last year, even though discounts weren't as deep as in recent months — and some manufacturers even raised prices.

The strong pricing was the result of a new made-to-order strategy adopted by China's automakers to avoid a repeat of last year's high inventory levels.

As a result, many would-be buyers will have wait to pick up their keys as popular models such as Toyota's Reiz, the Ford Focus and the new Passat Lingyu from Shanghai Volkswagen were out of stock even before the holiday began.

The encouraging sales performance followed an upward sales trend that began in October.

Small cars including the Cherry QQ, which were priced between 20,000 yuan (US$2,480) and 40,000 yuan, and the Gol by Shanghai Volkswagen were the most popular during the holiday, with sales surging 50 percent.

Prices were not as low as some buyers expected, however, due to the effects of the shift to a made-to-order strategy employed by more and more Chinese automakers, including Shanghai Volkswagen Automobile Co Ltd, Guangzhou Honda Automobile Corp and Guangzhou Toyota Motor Corp.

The smaller number of cars in stock showed up on the sticker prices at many sales lots.

For instance, Shanghai General Motor's Buick Excelle equipped with a 1.6-liter engine sold for 117,800 yuan during the seven-day holiday, almost 10 percent higher than two weeks ago, according to Shanghai Yongjie Auto Sales Corp.

Other models from Toyota Motors Corp and Shanghai Volkswagen, which offered 10,000 yuan discounts last year to bolster sales, were only 4,000 yuan cheaper this year.

"The new production strategy, which aims to ease inventories, lagged the heavy market demand after auto sales picked up again in the second half of last year," auto dealer Shen Gang told Shanghai Daily yesterday.

"The holiday car prices are temporary because most automakers will set prices high in hopes of generating as much profit as possible during the prime sales period, especially after being freed from pressure to achieve (year-end) sales targets.

"With more new cars to be launched and a more ample supply after Spring Festival, prices are likely to fall around the end of this month