By Rong Xiandong (chinadaily.com.cn)
Updated: 2007-08-09 14:22

China's passenger car inventory reached 120,000 units at the end of July amid sluggish car sales over the previous three months, according to an industry organization.

Statistics from the Union of National Passenger Car Market Information show a 31,000 unit gap between production and sales of passenger cars, including sedans, multi-purpose vehicles, sport utility vehicles (SUVs) and mini-buses, in July.

Passenger car production in July decreased by 11 percent from June to 464,000 units, while sales dropped 6.4 percent from June to 433,000 units. Sedan production in July dipped 10 percent from the previous month, while SUV sales plummeted by 31 percent from June.

Meanwhile, the newly added car inventory in June alone hit nearly 60,000 units, accounting for 13 percent of the cars sold in the same period.

In the first four months of this year, the monthly gap between production and sales in the national passenger car market averaged around 10,000 units, and the discrepancy expanded in May.

Experts said the stockpiling inventories have led to fierce price battle among carmakers, especially during May and July.

Sources from the association said sales decreases are normal and the competition in the car market could become even more acute in the future. They added that July is, more often than not, the month for record low sales in the second half of the year and that the car market is expected to recover in August after three months of flat sales.