Auto sales set record with unprecedented growth

Visitors flock to Ferrari's exhibit at the Shanghai International Auto Show in April last year. Photo: IC

By Cong Mu and Zhao Qian

Industry data showed Monday  that China's auto sales surged past those in the US in 2009 on government incentives to become the biggest auto market in the world, but analysts warned sales would slow this year.

The China Association of Automobile Manufacturers (CAAM) said more than 13.64 million units were sold last year, marking a record increase of 46.15 percent from the 9.4 million units sold in 2008.

Passenger vehicle sales reached more than 10.33 million units in 2009, up 52.93 percent year-on-year, the first time they passed the 10 million units mark. Meanwhile commercial vehicle sales rose 28.39 percent year-on-year to more than 3.31 million units, according to CAAM.

Auto output for 2009 increased 48.3 percent to 13.79 million units, the industry group said.

"The growth room for automobiles demand in the country is still very large, and residents' living standards and purchasing power are improving. That is why the sales volume soared," said Li Menghai, a senior auto analyst at TX Investment Consulting. He added that without the impact of the financial crisis, the sales would have been even higher.

Affected by the crisis, auto sales in the US fell 21.2 percent to 10.43 million vehicles in 2009, according to Autodata figures released last week.

Chinese auto sales and output in December continued to climb to record highs of more than 1.41 million units and more than 1.52 million units, up 91.67 percent and 144.94 percent respectively from the same period last year, the CAAM data showed.

The Chinese government has taken such stimulus measures as halving the sales tax on passenger cars with engines smaller than 1.6 liters and subsidizing auto purchases for farmers in 2009 to boost sales.

The CAAM said the tax break has had the biggest impact on auto consumption as it directly reduced the purchase price.

Analysts welcomed the news, but warned that China's auto sales could hit the brakes this year.