China's auto sales volume remains high

During China's Golden Week, few locals are interested in purchasing a car, so October sales are often low. But this year, the slump is most likely temporary, and China's auto market will continue to expand at rapid speed.

As the world's number 1 car market, China's auto sales continue to grow at an impressive speed.

In the first eight months of 2010, China has sold 40 percent more cars than during the same period last year. In simpler terms, about 1500 new cars hit the road in Beijing alone, every single day.

Although the Golden week holiday did little to boost sales in the Chinese capital, insiders say this is not surprising given that many people bought cars before the holiday and use them to go travelling.

Bao Hongqi, deputy director of Beijing Yayuncun Auto Trading market, said, "Car sales boomed in August, September, and the run-up to the October Holiday. The sales during the holiday slowed a bit. Among the cars sold, most SUVs and luxury cars were purchased by rich private business owners from Shanxi and Inner Mongolia. While Beijing locals usually chose affordable compact cars."

Auto dealers have stepped up incentives to lure customers, and clear rising inventories during the week-long holiday.

For some, lowered prices are a big draw.

A customer said, "I think I would buy this home-made SUV called Harvard. Its price is very low and it is a quality car. It's also easier to get spare parts as they are domestically produced."

For other customers, they say they do care about cost-effectiveness but they are more concerned about a car's fuel-efficiency and its damage to the environment.

A customer said, "To buy fuel efficient cars is fashionable and it makes me feel cool to save energy. I am now thinking to buy this Toyota SUV with a 2 Litre engine instead of an Audi Q5 with a 2.7 litre engine."

The National Development and Reform Commission predicts that car prices will likely fall in the fourth quarter, as auto makers join dealers in offering discounts. This will help car sales to total 16 million this year, making China the biggest profit generator for many global auto giants. German car maker Volkswagen is expected to reap half of its pretax profit here.