China already become No1 market in H1 auto sales

The U.S auto sales for the first half of the year were released: down 35.1 per cent at 4.8 million vehicles, reports by AFP.

But automakers there are cerebrating. Because the not too bad result, a 28 percent drop in June sales, has given them hope that the industry was stabilizing, after all this is the first time sales have fallen by less than 30 per cent since September 2008.

On the contrary, auto sales in China have already topped 4.96 million units in the January-May period, up 14.29 percent from a year earlier, and the H1 number is forecast at 6 million. Looking ahead, 10,130,000 - 10,300,000 sales volume are expected for the full year of 2009, a CAAM report said.

While appreciative of beneficial government policies and consumers support, Chinese automakers should be aware of the fact that their profits are actually sliding. The combined profits for the nation's top 19 automobile groups fell 48 percent in the first quarter to 10.8 billion yuan, a terrific figure given the sales boom reported.

Subsidies can not sustain demand for a long time. Chinese automakers have to consecutively improve their design and innovation capacity to meet the cutthroat competition in the market.