China 2010 vehicle sales growth to slow - paper

Growth in vehicle sales in China could see a large slowdown this year compared with 2009 due to the robust growth-rate of that year, but sales will still be strong, a state-run newspaper said on Saturday.

More than 13.5 million vehicles were sold in 2009, with China overtaking the United States to become the world's largest auto market as government policy measures spurred demand.

The China Daily cited a Commerce Ministry official as saying auto sales this year were forecast to rise about one-tenth from last year to more than 15 million units. Sales in 2009 jumped by almost a half, the fastest in more than 10 years.

"We are still confident of sales for 2010, as the government's policy to stimulate consumption at all levels will continue. But the robust growth momentum of last year cannot be sustained," it quoted Chang Xiaochun, head of ministry's market system development department as saying.

"Double-digit growth is not a difficult goal."

Industry observers attributed China's strong 2009 auto sales largely to government policy initiatives, which had effectively lifted market sentiment and attracted buyers back to showrooms.

A low comparative base in 2008, when car sales growth slowed to a single-digit rate for the first time in at least 10 years, also helped inflate the 2009 rate.

China has been a major bright spot amid global recession and a safe haven for battered industry giants such as General Motors and Ford Motor.

The market was likely to return to a slower but more rational growth rate of roughly 10 percent in 2010 on continued policy support from the government even though the renewed tax incentives for small cars were not as aggressive as expected, analysts have said.