Beijing

VEHICLES sales in China, the world's largest auto market, fell 14.6 per cent in April from the same month a year earlier, the country's biggest auto industry association said on Monday, marking the 10th consecutive month of decline.

Sales fell to 1.98 million vehicles, said the China Association of Automobile Manufacturers (CAAM).

That followed declines of 5.2 per cent in March and 14 per cent in February, as well as the first annual contraction last year since the 1990s against a backdrop of slowing economic growth and a crippling trade war with the United States.

Automakers have been lowering prices in China after the government introduced tax cuts to spur consumer spending. CAAM officials said customers were nevertheless holding off purchases in the hope of more favourable policies, hurting sales.

April's sales also suffered from some Chinese provinces implementing new vehicle emission standards earlier than expected, which stoked uncertainty among manufacturers, analysts, dealers and consumers, according to CAAM.

The government will require all light vehicles to adhere to tougher "China VI" emission standards by 2020 as part of efforts to combat pollution. In line with that, sales of new energy vehicles (NEV) have been a bright spot, rising 18.1 per cent in April to 97,000 vehicles, CAAM said. NEV sales jumped almost 62 per cent last year even as the broader auto market contracted.

While overall auto sales are declining, Toyota Motor Corp reported around 20 per cent growth last month with the help of revamped models of both its Toyota- and Lexus-branded models.

Conversely, SAIC Motor Corp Ltd, a Chinese partner of Volkswagen AG and General Motors Co, said group sales fell 16.8 per cent last month.

"Japanese carmakers have products that are better prepared for a switch in emission standard. At the same time they are offering more affordable products," a CAAM spokesman said, adding that the recent escalation in the trade war between China and the US, which has seen the US raise import tariffs on US$200 billion worth of Chinese goods, is likely to have a significant impact on China's exports of car parts.

Senior automotive executives attending the Shanghai autoshow last month said China's auto market is likely to return to growth in the second half of this year due to government support. They nevertheless said the days of high single- or double-digit growth were over and that industry consolidation was likely. REUTERS