Car Sales Rise 11% in China

Retail sales of passenger vehicles in China expanded 11% to 1.76 million units in May, according to the China Passenger Car Assn. The group says sales through the first five months of 2016 totaled 9.12 million.

May sales were helped by the reduced purchase tax that went into effect last October for new vehicles with small engines. But Bloomberg News says growth hasn’t been as strong as analysts expected.

The China Automobile Dealer Assn. reports that inventories of unsold vehicles continue to remain above normal. Bloomberg notes that rising production capacity and a flood of 120 new models due this year will continue to squeeze profitability, in part because producers are cutting prices.