BEIJING: China’s auto sales shrank for a second straight month in May amid weak demand following a rise in sales tax. An industry group, the China Association of Automobile Manufacturers, said sales contracted 2.6 percent compared with a year earlier to 1.75 million vehicles. Purchases of SUVs rose 13.5 percent, helping to offset a 9.3 percent plunge in sedan sales.
Sales in the world’s biggest auto market by number of units sold rose 15 percent last year after a 10 percent sales tax on small-engine vehicles was cut by half. Demand weakened after the government restored part of that in January, raising the tax from 5 percent to 7.5 percent. CAAM said sales for the first five months of this year rose just 1.5 percent compared with a year earlier.
