The Chinese auto market bounced up in June after consecutive sales drops in April and May, achieving a year-on-year increase of 6.21 percent. European cars continue to lead the Chinese auto market by winning the biggest market share and the strongest purchase intention.

Figures from the China Association of Automotive Manufacturers (CAAM) show that in June, sales of cars, sports utility vehicles (SUVs), multipurpose vehicles (MPVs) and minivans (collectively referred to as passenger cars) hit 1.1 million, a signal that the market is recovering from the ebb during the past two months. The accumulated sales for the first half of the year climbed to 7.22 million, a 5.75 percent increase year-on-year.

Dong Yang, vice-chairman of CAAM, says the bad sales performance of minivans is the major reason for the dim market in the past three months. "After the withdrawals of government incentives to boost car purchases, such as the purchase tax cut incentives and vehicle subsidy program for rural areas, minivan sales, which used to rely heavily on these policies, slumped," says Dong. "The soaring oil prices exacerbate the situation."

Deleting minivans from the total sales numbers for the first half of the year bumps up car sales growth to 9.62 percent when compared to last year.

European cars became the silver lining amid the gloom since April. In June, passenger cars from Germany and France took more than 21 percent of the Chinese auto market with 230,000 units, overshadowing the usual sales champion, Japanese cars, by 3 percentage points.

The world's third-largest automaker and top European brand, Volkswagen AG, continued to perch higher than any other car manufacturer. With FAW and SAIC as two joint-venture partners, Volkswagen sold 187,200 cars in China, accounting for almost one-fifth of the total car sales in June.

Volkswagen's sister brand, Audi, continued to lead the luxury car segment with 27,658 car sales in June in China, a new single-month sales record for the German brand. Since it has already sold 141,000 cars in the mainland and Hong Kong during the first half year, Audi will likely achieve its ambitious goal of selling 280,000 units in 2011. Closely following Audi is BMW with 21,158 deliveries in June, a year-on-year increase of 41 percent.

Mercedes-Benz, another luxury German automaker, triumphed as well with 16,925 deliveries, including Mercedes-Benz, Smart, AMG and Maybach, with a 59 percent growth year-on-year; while its S-series continues to be the prime selection for Chinese millionaires. During the first six months of this year, sales surged by 75 percent year-on-year making China the biggest market for the S series.

The resilience of European cars during the recession won confidence from the public. According to a recently released car purchase intention study by JD Power Asian Pacific, more people intended to buy European cars while interest in Japanese and Chinese brands has declined. The report says customers willing to buy European cars increased from 25 percent in 2009 compared to 32 percent in 2011.

The study indicates the top three considerations among potential customers are "comfortable ride", "easy to manipulate" and "beautiful appearance"; other factors include fuel economy, maintenance costs, the dealer's expertise and service, and the brand's dealership network.

By increasing market share from 20 percent in May to 22 percent in June, European car brands are nibbling away at the Chinese brands' territory. In June, the market share of Chinese cars shrank from 43.39 percent to 40.26 percent. European brands hold a stake of more than 80 percent of the Chinese luxury car market, in which Chinese automakers find it hard to beat European rivals.

Richard Wang, marketing manager of China Automobile Trading Co Ltd, a leading auto import and export company, says when the market is bad, only well-established brands can weather the conditions without a substantial loss.

"European cars have been around for more than 100 years, while most Chinese brands are younger than 20 years," Wang says. "We have to admit the distribution networks and the management systems of European brands are far better than Chinese ones."

Wang says this is apparent only when the market takes a turn for the worse. "Chinese companies have to get used to fair competition without government incentives," he adds.