BEIJING (Reuters) - China’s vehicle sales in January rose 11.6 percent from a year ago, the fastest pace in eleven months, but the country’s key automobile body cautioned it was still too early to say if the world’s biggest auto market was out of the woods.
The China Association of Automobile Manufacturers (CAAM), which pegged January sales at 2.81 million, kept its projection for a bleak 3 percent growth this year, same as 2017 but significantly below the stellar 13.7 percent gain in 2016.
The strong growth in January - after several months of tepid gains - should not be taken alone as a “barometer” for the whole year, CAAM officials said. It did, however, extend the market’s rising streak to an eighth consecutive month.
CAAM also pointed out that the year-on-year comparison was aided by the fact that the Chinese New Year holiday fell in January last year while it is in February this year, meaning January had a few less working days in 2017.
“We can’t really tell from the data if this is a good start yet, we need to wait until the end of the first quarter to see where things stand,” CAAM official Chen Shihua said at a briefing in Beijing on Friday.
In 2017, China’s auto sales fell short of a 5-percent growth forecast from CAAM, hurt in part by a phasing out of tax cuts on smaller engine cars that began last year.
According to CAAM, sales of new-energy vehicles (NEVs) in January increased 430.9 percent from a year ago to about 38,470 amid a government push to support the sector and shift away from traditional petrol-engine cars in the long term.
CAAM estimates that sales of NEVs, referring to all-electric battery cars and plug-in hybrid electric vehicles, will likely grow 40 percent this year versus to top the 1 million mark.
China’s finance ministry said in December it would extend a tax rebate on purchases of NEVs until the end of 2020, a boost for hybrid and electric car makers, although carmakers worry that other subsidies will be rolled back.
Reporting by Pei Li and Norihiko Shirouzu; Writing by Adam Jourdan; Editing by Himani Sarkar