China Jan car sales plunge due to holiday break

Sales could regain momentum in February due to in part, the base effect as year-ago sales were weak - the monthly tally was well below the 1 million mark, industry observers say.

Monthly data are skewed especially in the beginning of each year because of the Chinese lunar new year holiday, said John Zeng, director for industry consultancy LMC Automotive Asia Pacific region.

In 2011, the lunar new year break was in February. But it fell in January this year and shortly after the (Western calendar) new year celebrations. That is really not good for car sales.

China's 15-day Spring Festival holidays marking the lunar new year are the country's most important holiday period, and most companies shut down for about a week so workers can return to their hometowns to celebrate with relatives.

Industry insiders are divided on the market outlook for the full year, with forecast growth ranging from less than 5 percent to well over 10 percent. But few are expecting the breakneck expansion seen in 2009 and 2010 to recur.

China's once-booming car market cooled to a 5.2 percent gain last year, after jumping 53 percent in 2009 and 33 percent in 2010.

The slowdown has been attributed to a raft of factors, from the end of tax incentives for small cars

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