China-auto market China's auto market recovering tentatively

HONG KONG, Aug. 25 (Yonhap) -- China's auto market is recovering incrementally, as sales in the world's most populous country have regained momentum, a financial report said Thursday. Barclays Capital said in a report that China has seen a gradual acceleration in auto sales after recent months of falling growth momentum. Global carmakers started to see slower growth this year in China as Beijing halted tax breaks at the end of 2010 for those who purchase small cars and levied higher taxes at the beginning of this year. The tax breaks, introduced in 2009 to buoy domestic demand during the economic slowdown, boosted China's auto market and helped it overtake the United States as the world's largest in 2009 and 2010. "In China, fueled by increasing policy support, there has been a tentative recovery in auto sales," said Wai Ho Leong, an economist at Barclays. "But we do not see this trend kicking into high gear just yet." The marginal rebound in Chinese auto sales appears to have been driven by recent policy measures, the British investment bank explained. Earlier this month, the Beijing municipal government introduced a subsidy program to replace old cars with newer, energy-efficient models. "The re-introduction of the 'cash-for-clunkers' program designed to provide extra fuel for auto sales looks to have had a positive impact," the economist said. He added, however, the expiration of the tax incentives for small car purchases continues to weigh on demand, especially for China's locally made cars. ygkim@yna.co.kr