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The Canadian Press - ONLINE EDITION

China auto sales cool in June as domestic brands lose more share to foreign rivals

HONG KONG - Car sales in China cooled in June, with domestic brands falling further behind their foreign rivals in the world's biggest auto market, an industry group reported Wednesday.

Passenger vehicle sales rose 11.5 per cent last month over a year earlier to 1.56 million vehicles, down from May's 13.9 per cent growth, the China Association of Automobile Manufacturers said.

From January to June, passenger vehicle sales are up 11.2 per cent to 9.63 million.

Auto sales growth in China has been steadily easing since 2009, when it peaked at more than 40 per cent. Analysts expect sales this year to expand 8 to 10 per cent.

Total vehicle sales, including buses and trucks, increased 5.2 per cent to 1.85 million in June. That's down from 8.5 per cent growth in May.

Domestic brands continued to struggle, with their share of the overall market falling 3.5 percentage points to 37.7 per cent, the lowest level since 2009, according to the official Xinhua news agency.

Chinese brands are losing out as drivers increasingly favour models sold by their bigger, richer global rivals.

"China is a good market if you're just considering the sales and yield," said Zhang Xin, an analyst at Guotai Jun'an Securities in Beijing

He said the figures were better than expected given that June is traditionally a slow month for auto sales. "But the local brands don't do a good job. It's hard for them to get rid of the impression in the short term of being cheap and low quality."

Earlier, General Motors Co. said sales of GM-branded vehicles produced with its Chinese joint venture partners rose 9.2 per cent to 257,798. It was the company's best ever sales performance in China for the month of June.

Nissan Motor Co., China's most popular Japanese auto brand, said sales rose 11.5 per cent to 112,600 vehicles.

Ford Motor Co. said sales in the first half of the year jumped 35 per cent to 407,474 as June sales rose 17 per cent.

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Researcher Fu Ting in Shanghai contributed to this report.

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