China Jan car sales plunge due to holiday break

It's very hard to come up with a precise prediction when it comes to car sales in China. Government policies tend to play a big role here and can easily drive up or pin down the demand, said Sheng Ye, associate research director at industry consultancy Ipsos' Greater China region.

But there is no reason to be too pessimistic this year because of the growth potential in lower tier cities.

Only about 30 out of 1,000 people own cars in the northwestern provinces such as Gansu and Qinghai, a far cry from more than 200 in the Chinese capital city, according to Ipsos.

In January, a total of 1.16 million sedans, sport utility vehicles and multi-purpose vehicles were sold in the country, the China Association of Automobile Manufacturers (CAAM) said on Thursday.

That compared with 1.37 million cars sold in December, up 4.6 percent from a year earlier, according to CAAM.

In the United States, now the world's second-largest auto market, sales rose more than 11 percent in January, a surprisingly robust showing that marked the strongest annualized sales rate for the industry in nearly two-and-a-half years.

In Japan, car sales turned sharply higher in January, buoyed by the government's efforts to help its struggling auto industry, while sales in South Korea shrank on a slowing economy and a lull during the Lunar New Year holiday.

SALES DECLINES

In China, January was not a good month for most foreign auto makers.

Ford Motor shipped

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