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China vehicle sales tumble in Feb, snap 8-month rising streak

[BEIJING] China's vehicles sales in February fell 11.1 per cent from a year earlier to 1.72 million vehicles, an industry body said on Friday, as growth in the world's largest auto market reversed after a rapid start to the year.

The steep drop, impacted by the timing of the week-long Chinese New Year holiday which was in February this year but January in 2017, comes after vehicle sales rose 11.6 per cent in the first month of the year, the fastest in 11 months.

The February drop marked the end of an eight-month rising streak for China's autos market, even if growth has generally been tepid since the second-half of last year.

China vehicle sales for the first two months of the year combined were up 1.7 per cent at 4.53 million.

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The China Association of Automobile Manufacturers (CAAM), which has predicted 3 per cent market growth this year, said it was hard to determine full-year growth. Sales rose 3 per cent last year, sharply down from a 13.7 per cent gain in 2016.

"Regarding the annual sales target, whether it is 3 or 1 or 5 per cent, whether it's from CAAM or an industry forecast, it's not numerically important," Li Shaohua, CAAM assistant secretary general, told a press briefing in Beijing.

"It's too early to determine the full-year picture based on the January-February trend." China's auto market has been facing a slowdown overall. In 2017, auto sales in the market fell short of a 5-per cent growth forecast from CAAM, hurt in part by a phasing out of tax cuts on smaller engine cars that began last year.

CAAM said sales of new energy vehicles (NEVs), referring to pure electric and plug-in hybrids, rose 95.2 per cent in February to 34,420 units. Sales of NEVs in the first two months of the year surged 200 per cent to 74,667 vehicles.

China is making a major push to support the NEV sector and drive a shift away from traditional petrol-engine cars. The industry body has previously said the segment will grow around 40 per cent this year to top sales of 1 million low-energy cars.