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(Recasts 1st paragraph, adds association officials' comments on outlook for auto sales, effect of Japan quake, auto exports and international firms' market share in the 2nd, 8th-10th and 12th paragraphs, analyst's comment on auto incentives in 6th paragraph, foreign auto companies' China sales in 13th-16th paragraphs.)
BEIJING (Dow Jones)--Auto sales in China fell 0.25% in April from a year earlier to 1.55 million units, the first such decline in two years, due to the disaster in Japan and the cancellation of government subsidies, and more declines are possible in the coming months amid higher oil prices and purchase limits in first-tier cities.
Growth in China's auto sales this year is likely to fall short of previous expectations of a 10%-15% expansion, and could even come in below the country's economic growth rate, China Association of Automobile Manufacturers Secretary General Dong Yang said at a news briefing Tuesday.
Passenger vehicle sales totaled 1.14 million units in April, up 2.79% from a year earlier, according to the semi-official industry group.
In the January-April period, overall auto sales grew 5.95% from a year earlier to 6.53 million units, while passenger vehicles sales rose 7.55% to 4.99 million units, the association said.
Part of the reason for the slowing sales growth is that China has cancelled incentives that had previously supported the industry, including a subsidy for purchases of cars with small engines and subsidies for people in small cities or rural areas to buy vehicles.
The only remaining incentive--a CNY3,000 cash subsidy for purchases of certain small-engine cars--will likely end in June, which will add to the pressure on auto sales, said Zhang Xin, auto analyst at Guotai Junan Securities.
Supply chain disruptions caused by the earthquake and tsunami in Japan in March have also affected sales.
"We still can't get detailed reports from Japan about the parts disruption, so we need more time to estimate the earthquake's impact on China's auto industry, but we did get reports from all Japan car makers about their production suspension in China," Dong said.
Japanese auto maker Honda Motor Co. said earlier it suspended production at some of its China plants for "routine checks," adding that the stoppage had nothing to do with the March quake and tsunami in Japan.
Dong said China's annual auto exports will eventually rise to 10% of total output. Exports accounted for 2.98% of China's overall 2010 output of 18.3 million units, according to the association.
Sales of Chinese own-brand passenger vehicles fell 0.19% in April from a year earlier, according to the association.
Japanese passenger cars' market share fell 3.07 percentage points in April from a year earlier while the share of other international car makers, including Germany and the U.S., grew during the month, Zhu Yiping, the association's deputy secretary general, said at the news briefing.
Sales data issued by several auto makers earlier this month had flagged the decline in sales in April.
Ford Motor Co., which recorded the fastest sales growth in China last year among all Western auto makers, said Friday its sales grew 3% in April from a year earlier to 44,340 units, its slowest monthly growth rate so far this year.
Toyota Motor Corp. said Friday its vehicle sales in China dropped 23.5% in April from a year earlier to 48,700 units after parts-supply disruptions arising from the March 11 quake in Japan forced it to cut production in China.
General Motors Co., which had a 13% share of China's auto market last year, reported its first ever year-on-year sales decline in April. The company said Thursday the company and its joint-venture partners sold 203,367 vehicles in China in April, down from March's record sales.
-Yajun Zhang and Stefanie Qi contributed to this article, Dow Jones Newswires; (86 10) 8400-7712; yajun.zhang@dowjones.com
