China car sales to grow by 1 mln units each year

Shanghai, November 25 (Gasgoo.com) Car sales in China are expected to grow by 1 million units in each of the coming 10 years, spurred by economic growth and low car-ownership, Dow Jones reported today, citing an auto industry official of the world's most populous nation (of more than 1.3 billion people).

Over 60% of car buyers in China are first-time buyers, and more than 90% of Chinese car buyers make their purchases with cash, not reliant on bank loans, said Dong Yang, executive vice chairman of China Association of Automobile Manufacturers (CAAM), yesterday at a cross-strait auto makers forum in Taipei.

"At this stage of auto market development, this trend of first-time buyers will continue for some time," said Dong. Earlier this month, the semi-official industry group CAAM estimated that auto sales in China will reach 13 million units in 2009, up 38.6% from 9.38 million units in 2008.

Since January, the Chinese government has released a raft of incentives for the auto market, such as sales tax cuts for small-engine cars and subsidies for rural buyers of clean vehicles, which have boosted car sales this year. The tax breaks and subsidies may be extended to next year.

China's vehicle sales in the January-October period surged 38% to 10.89 million units from a year earlier, according to the association. Sales in both November and December won't fall below 1.2 million units each month, Dong said.