Car Sales in China Climbed 11% in July

Wholesale deliveries of passenger vehicles in China climbed to 1.24 million units last month from 1.12 million a year earlier, despite the country's tepid economic growth, according to the China Assn. of Automobile Manufacturers.

China's retail car sales are expanding even faster than wholesale deliveries, IHS Automotive tells The Wall Street Journal. CAAM says demand is being buoyed by discounts from dealers. The group cites a vehicle inventory index for the country, which slid to 53.2 from 56.1 in June. A reading of 50 indicates a reasonable supply.

Analysts tell Bloomberg News that manufacturers in China are using their expanded capacity to produce more vehicles and relying on incentives to sell them. That strategy, which saps profits and tarnishes brand image, proved disastrous for Detroit's carmakers in the early 2000s.

Wholesale deliveries of passenger and commercial vehicles in the country rose 10% year over year to 1.52 million units last month. In the January-July period, total vehicle volume grew 12% to 12.30 million units, including a 13% advance to 9.90 million units for passenger vehicles.

SUV demand surged 45% to 235,000 units in China last month, led by Great Wall's Haval family of models. Sedan sales advanced 7% to 840,000 units. The Ford Focus compact was the segment's top seller.

General Motors and its Chinese partners boosted volume 11% to 221,600 vehicles in July. Ford deliveries shot up 71% to 72,800 units.

Chinese sales by Japanese automakers remained in the doldrums last month. Demand edged up 2% to 90,900 vehicles at Nissan. But deliveries fell at Toyota (-4% to 75,600 units) and Honda (-2% to 51,100).

Chinese brands increased volume 6% to 435,500 vehicles for a 35.2% of the country's July sales, their lowest market share since 2008.

Luxury brands fared well in the country. BMW sales soared 39% to 39,200 vehicles, outpacing rival Mercedes-Benz (+31% to 18,500 units). Audi deliveries, which include the Hong Kong market, jumped 27% to 41,800 vehicles. Analysts estimate that the marque trails BMW in mainland China.