BEIJING – Auto sales in China, the world's biggest car market, rebounded in August as subsidies for energy-efficient vehicles and a stronger currency spurred demand, while sales in the U.S. faltered.
Sales rose 55.7 percent over a year earlier to 1.21 million vehicles, up from 1 million vehicles the month before, the Cabinet's China Automotive Technology and Research Center said Wednesday.
The increase compared with 17 percent year-on-year growth in July and 19.4 percent in June.
The upbeat news from China contrasted sharply with figures on U.S. auto sales, which had their worst August since 1983. General Motors, Toyota, Honda and Ford all reported declines from the month before and from a year earlier.
Initial data showed U.S. sales in August at about 997,000, down 5 percent from July, according to AutoData Corp.
In China, though, sales of energy saving vehicles rose 32 percent to 129,600, the China Automotive Technology and Research Center said in a report posted on its website.
Demand was also relatively strong for imported vehicles, as Japanese and European automakers increasingly focus on serving the market for smaller, affordable cars, said its chairman, Zhao Hang, without giving specific figures.
A recent rise in the value of China's currency has also stimulated sales of imported cars. "That makes things cheaper," he said.
In June, China loosened controls that had kept its currency trading at about 6.83 yuan per U.S. dollar for over a year. Late Wednesday, the yuan was trading at 6.8112 to the dollar.
The rebound in sales is good news for global automakers looking to China to drive sales amid weak global demand. Sales this year are forecast to grow by no more than 20 percent, well off 2009's stunning 45 percent rise.
General Motors Co. reported that its sales in China rose 19.2 percent in August from the year before to 181,625 vehicles, with sales for the first eight months of 2010 at 1.5 million units.
In the U.S., both GM and Ford Motor Co. said fell 11 percent in August from the year before, while Toyota Motor Corp. saw sales fall 34 percent.
The automotive center, one of several sources of monthly data on Chinese auto sales and production, estimated sales in January to August at 9.5 million vehicles, up almost 32 percent from the same period of 2009.
Monthly sales growth had waned after March's 63 percent rise, prompting Beijing in June to renew subsidies of 3,000 yuan ($443) per vehicle for fuel-efficient cars and small trucks.
Automakers have nonetheless begun cutting back on output to match slowing demand.
Production rose 10 percent in July to 1.2 million units, down slightly from July, the report said. Output in the first eight months rose 35.5 percent, to 10.9 million vehicles, it said.
Associated Press researcher Bonnie Cao contributed to this report.
NEW YORK (Reuters) – Great Atlantic & Pacific Tea Co (GAP.N), which operates the struggling A&P supermarket chain, is mulling the sale of its Food Emporium stores to boost liquidity, the Wall Street Journal reported, citing people familiar with the matter.
The supermarket chain, which announced plans last month to close 25 under-performing stores, runs more than 400 stores under the A&P, Waldbaum's, Pathmark, Food Emporium and Food Basics names.
The Food Emporium chain includes 16 stores in Manhattan.
The WSJ report came as the grocery store chain struggles to turn around its business and recently named a new chief executive.
Investment bank Peter J. Solomon has made an effort in recent weeks to gauge potential buyer interest in the Food Emporium chain for A&P, the WSJ said, citing one private equity investor.
The investment bank and Great Atlantic & Pacific Tea Co could not be reached for comment by Reuters out of regular office hours.
It wasn't immediately clear which other banks may be involved, the WSJ said.
(Reporting by Dhanya Skariachan; Editing by Anshuman Daga)
NEW YORK (Reuters) – Automaker General Motors Co plans to begin courting investors for its initial public offering immediately after the November 2 U.S. midterm congressional elections, two sources familiar with the plans said on Wednesday.
GM's roadshow is set to begin on November 3 and will last two weeks, the sources said. The IPO is expected to price on November 17 and debut on November 18, the sources said.
The sources cautioned that the plans were still being finalized and could change based on how U.S. stock markets perform.
Waiting until after the November 2 elections would also allow bankers to tout GM's third-quarter financial results to investors although the automaker has cautioned that the second half of the year will show a slowdown from the first half.
In August, GM filed paperwork for an IPO that could be worth as much as $20 billion, making it potentially one of the biggest IPOs of all time and the biggest new issue in the United States since Visa Inc's March 2008 IPO of $19.7 billion.
The final value of the IPO has not been set but one source said early plans for the IPO envisioned selling $12 billion to $16 billion in common stock and $3 billion to $4 billion in preferred stock that would convert to common stock under a mandatory provision.
GM filed paperwork for its IPO just over a year after emerging from a government-sponsored restructuring in bankruptcy. The U.S. government poured $50 billion of taxpayer money into the carmaker and emerged with a 61 percent stake.
Despite its success in preventing the liquidation of GM and Chrysler that many analysts had feared, the government bailout of the U.S. auto industry has been criticized by Republican lawmakers and proved unpopular with voters.
The Obama administration is eager to cast the GM IPO as a success, but GM executives and government officials have repeatedly denied any political motivation in timing the IPO for the top U.S. automaker so close to the mid-term congressional elections.
Republicans are likely to gain ground when all 435 seats in the U.S. House of Representatives and 37 of the 100 seats in the Senate are up for grabs in the November 2 midterm elections, analysts say.
The high jobless rate is dragging on the Democrats' poll ratings and Republicans might win control of the House and probably pick up seats in the Senate.
The Obama administration has pledged to begin selling down its stake in GM as soon as practical and had said that process would begin in late 2010 at the time GM exited bankruptcy last year.
A final decision on how much of its stake in GM the U.S. Treasury will sell in an IPO will be made in consultations led by Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers after the terms of the deal are established, sources have said.
GM is waiting for its S-1 filing to be approved by the U.S. Securities and Exchange Commission.
Its shares will trade on both the New York Stock Exchange and the Toronto Stock Exchange since both the U.S. and Canadian governments helped bail it out.
(Reporting by Clare Baldwin and Soyoung Kim in New York and Kevin Krolicki in Detroit; Editing by Richard Chang)