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Jan 12, 3:33 AM EST

China auto sales shrink in December, end year up 1.4 percent



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BEIJING (AP) -- China's auto sales shrank in December and ended 2017 up a lackluster 1.4 percent over a year earlier as the popularity of SUVs helped to offset falling demand for sedans, an industry group reported Friday.

Last month's purchases of SUVs, sedans and minivans in the biggest market by number of vehicles sold shrank 0.7 percent from a year earlier to 2.6 million, the China Association of Automobile Manufacturers said. Total vehicle sales including trucks and buses edged up 0.1 percent to just over 3 million.

Weak demand is a setback for global automakers looking to China to drive revenue at a time when Beijing is pressing the industry to pour resources into developing electric vehicles.

2017's annual growth was barely one-tenth the previous year's 15 percent rate, which was boosted by a temporary tax cut.

Chinese demand has weakened as economic growth slowed and Beijing and other major cities tightened restrictions on car ownership to curb smog and congestion.

SUV sales in December rose 8.4 percent over a year earlier to just under 1.2 million, accounting for 46 percent of the total. Sedan sales shrank 4.3 percent to 1.2 million.

For the year, SUV sales raced ahead 13.3 percent to 10.2 million while sedan demand shrank 2.5 percent to 11.8 million.

Global auto brands including General Motors Co., Volkswagen AG and Nissan Motor Co. and local brands including Geely and BYD have grown faster than the market, taking share from smaller Chinese rivals.

2017 sales by Chinese brands rose 3 percent to 10.8 million. Their market share expanded by 0.7 percentage points over 2016 to 43.9 percent.

Sales of lower-cost, Chinese-brand SUVs, the most popular vehicle segment, surged 18 percent over 2016 to 6.2 million.

The industry is the midst of a massive investment campaign to ramp up production of electric vehicles under pressure from Beijing to meet official minimum sales targets that take effect in 2020.

VW announced in November it will spend $11.8 billion by 2025 to develop and manufacture all-electric and plug-in hybrid vehicles for China.

Ford Motor Co. announced plans last month to roll out at least 15 new electrics in China by 2025. GM previously announced plans to start production of a pure-electric vehicle in China and launch 10 electric or gasoline-electric hybrids by 2020.

General Motors said 2017 sales of GM-brand vehicles by the company and its Chinese manufacturing partners rose 4.4 percent from a year earlier to just over 4 million.

VW said December sales totaled 342,100. 2017 sales were up 5.9 percent at 3.2 million.

Nissan said monthly sales rose 13.4 percent to 184,297. Annual sales advanced 12.2 percent to 1.5 million.

Ford's December sales slid 9 percent to 140,103. For the year, sales were down 6 percent at just under 1.2 million vehicles.

Toyota's sales gained 9.4 percent to 107,500. For the year, they were up 9.4 percent at 1.3 million.

Geely, known abroad as owner of Sweden's Volvo Cars, said December sales by its own brand in China rose 42 percent over a year earlier to 153,625. 2017 sales were up 63 percent at just over 1.2 million.

BMW AG said December sales of BMW and Mini brand cars rose 19.2 percent to 52,026. Full-year sales were up 15.1 percent to 594,388 vehicles.

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China Association of Automobile Manufacturers (in Chinese): www.caam.org.cn

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