China expects double-digit growth in '10 auto sales

Shanghai, January 29 (Gasgoo.com) China expects its auto sales to grow by double digits this year as the government continues its policies to stimulate sales and people's buying power is rising, Dow Jones reported today, citing a commerce official.

"I believe double-digit growth shouldn't be difficult, although growth won't be as high as last year," Chang Xiaocun, head of the Ministry of Commerce's market system construction office, said at a news briefing today.

There is still room for growth in auto sales across China, despite the already high number of cars in major cities such as Beijing, Chang said, adding that the surge in auto sales last year was driven by private demand, rather than government purchases.

Last year China saw its auto sales soar 46% to 13.6 million units and overtaken the United States as the world's largest auto market. The strong sales were partly due to stimulus policies to boost auto demand.

The Chinese government halved (to 5%) the sales tax on cars of 1.6-liter and smaller engines one year ago. The tax is now 7.5%, up from 5% in 2009 but still lower than the normal 10% rate.