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Auto makers see limited sales impact
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Chinese car makers said an abrupt fuel price hike will have limited impact on their sales, but are worried the continuous price increase will cool the overall market in the long term.

"We do not expect a sudden sales drop because the latest rise of less than one yuan per liter won't be a big deal for auto buyers,'' said official from Shanghai Volkswagen Co Ltd. "But low-end models might be hit as customers of these cars are more sensitive to the additional costs."

She also did not dismiss the possibility that some buyers may consider postponing their purchases.

China raised gasoline and diesel prices by 17 percent and 18 percent respectively from yesterday.

The price increase translated into mark-ups of 0.8 yuan and 0.92 yuan per liter, leading to an extra 140 yuan expenditure per month for an average Honda Accord user, industry watchers said.

"The marginal impact on users is small,'' said Jun Ma, chief economist at Deutsche Bank in Hong Kong.

''Following the last two gas price hikes (each around 10 percent), there was a short-term deceleration in the first two months.''

But Ma believed that historical experience shows that the purchasing mode will soon recover.

(Shanghai Daily June 23, 2008)

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