Report: China's Auto Sales Growth Weakens In July

BEIJING (AP) -- Auto sales growth in China, the world's biggest market, weakened further in July, data showed Monday.

Sales rose 17.2 percent to 1.05 million units, the official Xinhua News Agency said, citing the Cabinet's China Automotive Technology and Research Center. That was down from the 19.4 percent growth reported in June and the report said August sales are likely to weaken further.

Automakers are looking to China to drive sales amid weak global demand. Sales this year are forecast to grow by no more than 20 percent, well off 2009's stunning 45 percent rise.

China passed the United States last year as the biggest auto market by number of vehicles sold on the strength of sales tax cuts, subsidies to rural buyers and incentives to encourage drivers to switch to cleaner models.

Monthly sales growth has fallen steadily from March's 63 percent rise. Beijing renewed subsidies on a smaller scale in June, promising 3,000 yuan ($443) per vehicle for fuel-efficient cars and small trucks.

Total sales for the first seven months of 2010 were 8.2 million units, up 28.6 percent over the same period of 2009, the report said.

Spokespeople for the automotive center said they could not immediately release the data cited by Xinhua. The agency is under the State-owned Assets Supervision and Administration Commission, the Cabinet agency that oversees China's biggest government companies.

In China, automakers face rising costs and labor tensions, highlighted by recent strikes at parts suppliers affiliated with Honda Motor Co. and Toyota Motor Corp. that disrupted production.

Sales in July were down 6.7 percent from the previous month, Xinhua said.

Auto production in July rose 12.9 percent to 1.3 million units but was a decline from June, the report. It said production for the first seven months rose 39.4 percent from a year earlier to 9.7 million units.

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