* Jan-Feb YTD sales +8.8 pct
* Tax cut on small-engine cars rolled back from Jan 1
* Green energy car sales rebound around 30 pct
(Adds detail, background)
By Fang Cheng and Jake Spring
BEIJING, March 10 China's auto market grew 8.8
percent year-on-year in the first two months of 2017, its
automakers association said on Friday, bucking expectations
that consumer demand would suffer as a key tax incentive is
February sales rose 22.4 percent from a year ago to 1.9
million vehicles, the China Association of Automobile
Manufacturers (CAAM) told reporters.
Combined figures for the first two months of the year are
viewed as a more reliable indication of the strength of the
market as the timing of Lunar New Year holidays, which drag on
sales, varies between January and February each year.
"In January and February, Spring Festival and other factors
mean the data should not be overinterpreted," said Xu Haidong,
CAAM assistant secretary general.
"In March and April, the numbers will more clearly show
relevant (market) conditions."
Sales growth in the world's second-largest auto market is
expected to slow this year, after China cut its GDP growth
target and as a tax incentive for vehicles with engines of 1.6
litres or below was reduced from Jan. 1.
CAAM predicted in January that 2017 sales would rise 5
percent this year, compared to 13.7 percent in 2016.
The purchase tax for small-engine cars climbed to 7.5
percent this year from 5 percent in 2016 after the government
stepped in to stimulate slumping sales. The tax will rise to the
normal 10 percent rate next year.
Executives at Volkswagen AG and other automakers
had warned first quarter sales growth was set to be weak, after
buyers late last year rushed to take advantage of the larger tax
incentive before the Jan. 1 deadline.
Sales in the green energy vehicle segment jumped in February
by around 30 percent year-on-year, rebounding from a 74 percent
decline in January when subsidies were reduced 20 percent.
Subsidy approvals, which automakers must reapply for this year,
have also slowed amid stricter oversight.
(Reporting by Fang Cheng and Jake Spring; Editing by Randy Fabi
and Joseph Radford)