China auto sales projected to grow 5% in 2009

Shanghai, January 13 (Gasgoo.com) Auto sales in the China are projected to grow about 5% in 2009, xinhuanet.com reported today, citing an official with an industry association.

Dong Yang, vice chairman of the China Association of Automobile Manufacturers, also said in a press conference yesterday that the growth of China's auto industry will 'mainly depend on the contents and timing of government policy support.' Auto sales rose 6.7% to 9.38 million units in 2008, the slowest growth rate in the past 10 years.

The official said that about 60% of auto consumers in China are first-time car-buyers, and the auto exports only account for 10% of the auto industry's total revenues. Therefore, China's auto industry is less affected by the global financial crisis and the 5% growth rate is an optimistic forecast.

The auto industry's is a driving force of Chinese economy. State media reported that plans to support the steel and auto sectors have already been submitted to the State Council, China's cabinet, for approval, and are expected to be launched by this weekend or later this month.

According to the rescue package, taxes on purchases of vehicles with the engine displacement under 2.0 liters and under 1.6 liters could be removed, while other measures will also be implemented to ensure an average of 12% annual sales growth over the next three years.