World's top auto market keeps expanding

• Source: Xinhua
• [08:34 January 25 2010]
• Comments

Shen Lu just bought herself a red Mazda 3 as a new year present.

"It looks beautiful and has large space. I bought it to replace my old car, a small Chery QQ," said the 27-year-old IT practitioner.

"Cars with displacement of 1.6 liters, like the Mazda 3, are cheaper with reduced purchase tax," she added.

Shen's Mazda is one part of the mushrooming auto fleet that expands by 1,500 new vehicles every day in Beijing, a city that already has 5.7 million drivers and over four million automobiles.

The young white collar represents a consumer group that is pushing China, the newly-crowned world's top auto maker and market, to become a even larger auto market in the coming years.

China's auto sales rose 46.15 percent year on year to 13.64 million units last year, and output went up 48.3 percent to 13.79 million units in the same period, according to data from the China Association of Automobile Manufacturers.

YOUNGER, EASIER AND FASTER

Shen Lu can still remember how she envied her classmates whose families had cars when she was still a school girl, and now she had already bought her second car.

"Car has become a part of my life," she said.

"It is more convenient to go shopping or go out on picnics with a car. Most of my friends have cars or are planning to buy one," she explained.

To some urban Chinese, especially the young white collars, cars were no longer luxuries, but commonplace consumer goods, said Xie Liang, a senior editor of an auto magazine in Beijing.

"In China, it has become easier for people to find vehicles to their taste, and they are quick to decide," he said.

Lin Meiying, an accountant who worked in Hangzhou, southeastern China, said it only took her a month from planing to actually buy a car, a Mitsubishi Lancer.

"It (buying a car) is not a small expense, but to buy one is not a very big deal nowadays," she said.

The thriving auto market is seen as a result of an increase income and relatively stable prices of auto vehicles, said Xie.

"Urbanization and favorable tax policies on cars also contributed to the booming," he said.

To spur the use of clean and fuel-efficient cars, the government cut the purchase tax to 5 percent on vehicles with a displacement of less than 1.6 liters last year. The tax cut incentive has been extended to this year, with purchase tax being raised to 7.5 percent.

According to Jia Xinguang, an independent auto industry analyst, to follow the fashion was also a reason that more and more young people bought cars.

"These young people like fancy looking, cheap cars that look like racers or SUVs. For some of them, to look fashionable is the main reason of purchase," he said.

"And more parents, who might not be able to afford a car at a early age, are willing to buy cars for their children as gifts," Jia said.