Car Sales Surge in China

BEIJING—China's growth in car sales accelerated sharply last month thanks in part to new government incentives for small fuel-efficient cars, the state-run Xinhua news agency reported Wednesday.

Car-sales growth in the country has been slowing recently from its torrid pace in 2009, and analysts have widely expected it to continue slowing. But overall automobile sales in August rose nearly 56% from the same month a year earlier to 1.21 million vehicles, Xinhua said, citing data from the China Automotive Technology and Research Center, or Catarc. The center couldn't be reached for confirmation. Xinhua said August sales rose about 15% from July.

Xinhua said Catarc believes that sales were spurred by, among other factors, government subsidies for vehicles—particularly subsidies of 3,000 yuan ($441) each for purchases of certain fuel-efficient vehicles with 1.6-liter or smaller engines. The government announced those incentives in June and gradually began implementing them over the past two months.

The new incentives for fuel-efficient cars were announced by Beijing in the face of concerns about a significant slowdown in sales later this year.

When auto sales began slowing in June, dealers began offering more generous discounts and incentives to spur sales of new vehicles. But that had the opposite effect in some cases, said Naoto Oikawa, a Beijing-based spokesman for Mazda Motor Corp. of Japan.

Read more at The Wall Street Journal

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