China' auto market poised for steady growth in 2011

On the other hand, judging from the market laws, domestic market has grown from small to large, and the production and sales are both keep upgrading in the past ten years. As the auto production needs more capital and longer production circle, it responds slower than the market changes. Its market production and sales showed a step-forward growth with two years as a phase from 2000 to 2009. The growth rate of production and sales in 2000 and 2001 was around 13 percent; in 2002 and 2003 was 39 percent, 37 percent and 37 percent, 35 percent respectively; in 2004 and 2005 dropped to 14 percent, 13 percent and 15 percent, 14 percent respectively; the growth rate of production and sales in 2006 and 2007 rose back to 27 percent, 22 percent and 25 percent, 22 percent respectively; in 2008, influenced by the steel price rise, cost rise, and subdued demands caused by international financial crisis, the growth rate of production and sales were under 10 percent for the first time, dropping to 5.21 percent and 6.7 percent respectively; stimulated by all favorable policies in 2009 and 2010, the growth rate of production and sales in 2009 reached 48 percent and 46 percent, making new high in the history respectively; and the growth rate of production and sales in 2010 were both over 32 percent. Other factors excluded, the market will enter a stable growth period in 2011. As the production and sales base becomes ever larger, the growth rate of auto market will likely be 10 percent to 15 percent, and it is also a rational and controllable growth range.

In recent years, the automobile industry has become a crucial pillar industry of China's national economy. Although some preferential policies will expire and be cancelled in 2011, and the transportation restriction measures will be launched in specific cities due to the serious traffic jam, the macro tendency of the state's policies for the automobile industry, namely continuous encouragement of automobile manufacturing and sales, will not change in the "Twelfth Five-Year Plan" period. It is predicted that the consumption demands for automobiles will keep a steady and comparatively quick developing tendency to an increase of 10 to 15 percent in the forthcoming five to ten years.