Smog drives Chinese sales

Car manufacturers in China are boosting sales while the sun shines. Or at least while they think it’s shining…

Increasing air pollution has prompted six of China’s biggest cities to limit new car sales by imposing license plates quotas, resulting in many new car purchasers rushing dealerships across the country.

Bloomberg reports passenger vehicle sales rose 13 per cent in April to 1.5 million units, the surge largely attributed to the new restrictions and fears they will be introduced more widely across the country.

Rumours that Nanjing would join the six prompted a rush of buyers to its local motor show, with about one car sold every three minutes during the exhibition, while sales surged by as much as 40 per cent in April at some dealerships, according to the state-backed radio station.

Premier Li Keqiang has declared a war on “smog” and the World Health Organisation said last month air pollution contributed to seven million deaths worldwide in 2012 -- with 40 per cent of those coming from the region dominated by China under the WHO's classification system.

Brands benefiting from April’s sales surge included Ford, which is up 29 per cent, while Nissan grew 15 per cent and Toyota was up 12 per cent. However, General Motors was only up six per cent while Honda actually fell 3.6 per cent.

China is already the world’s largest new vehicle market, but ownership rates per head of population are still relatively low. The China Association of Automobile Manufacturers estimates sales will climb 10 per cent in 2014.

That is actually a dip from the 14 per cent growth rate in 2013, with sales expected to slow as the anti-pollution measures and an austerity campaign take hold as the year progresses.