Domestic auto output in May decreased by 17.81 percent compared with April to 320,600 units, according to statistics released at the weekend by the China Association of Automobile Manufacturers.

Sales of Chinese-made vehicles stood at 317,800 units in May, a decrease of 16.85 percent from the previous month, according to the association.

Output and sales of all categories of vehicle, including passenger cars, trucks and buses, declined in May from April. This has seldom been seen in recent years, said association spokeswoman Zhu Yiping.

"The situation indicates that the spread of SARS had had a negative impact on the auto industry," Zhu said.

Trucks saw the biggest decline in output, falling 33.87 percent to 83,800 units in May compared with April, association statistics showed.

Truck sales dropped by 28.98 percent to 88,000 units last month compared with April.

Passenger-car output reached 158,300 units in May, down 4.34 percent from the previous month, according to the association.

Sales of passenger cars decreased by 6.01 percent to 146,800 units in May, compared with April.

Bus output stood at 78,500 units in May, down 19.80 percent from April, according to the association. Sales of buses reached 83,000 units, down 18.69 percent.

Zhu said: "However, there should be no problem in both output and sales (of all motor vehicles) reaching 2 million units during the first half of this year, boosted by auto makers new product launches and price cuts."

Output of all motor vehicles topped 1.73 million during the first five months of this year, up 33.91 percent compared with the same period of last year. The corresponding sales figure was 1.67 million units, up 31.46 percent.

There was an unprecedented number of new product launches and price cuts by auto makers in China in the first five months of this year.

Among dozens of new models launched were the Regal of Shanghai General Motors, the Mondeo of Chang'an Ford and the Mazda M6 of the FAW (First Automotive Works) Car Co.

Last week, the FAW Car Co slashed the price of its Red Flag sedans by up to 40,000 yuan (US$4,800), the biggest price cut so far this year.

Su Hui, general manager of the Beijing Asian Games Village Automobile Exchange, said: "Price wars are expected to escalate between car makers to fight for market share, with more and more new models being launched during the second half of this year."

(China Daily June 17, 2003)