World's top auto market keeps expanding

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

VAST RURAL MARKET

Another notable phenomenon in China's expanding auto market is that China's rural residents have begun to cast their eyes on cars.

According to the Foton Chinese Index for Mobility of 2009, an annual survey jointly conducted by the Beijing-based Beiqi Foton Motor Co Ltd and Horizon Research Group and aimed at offering an insight into Chinese people's mobility, rural demands for cars increased.

According to the survey, 12.4 percent of interviewees in small towns and 11.5 percent of interviewed villagers have expressed interests in buying a car.

Last year, China had started to subsidize vehicle buyers in rural areas with 10 percent of price of the vehicle.

Boosted by the stimulus policy, sales of light truck, which are widely used in rural areas, increased by 17.35 percent to 1.13 million units year on year in the third quarter last year, according to the China Automobile Dealers Association.

According to the Foton Chinese Index for Mobility, of all the farmer interviewees that planned to buy a car in the next year, 17.4 percent of them had moved up their plans because of the subsidizing program, while 11.5 percent of them had decided to have cars because of the program.

Data from the Ministry of Finance showed that by the end of 2009, China had provided 8.7 billion yuan (about $1.27 billion) of subsidies to rural auto purchases, covering 5.83 million auto vehicles.

Shao Qihui, honorary chairman of the Society of Automotive Engineers of China, said that in 2009, vehicles in rural areas could only meet 30 percent of the total demand for rural transportation.

Relatively low income in the rural areas compared with cities hampered rural vehicle consumption, and trucks, tractors and even horse carts were used to for passenger transport in the countryside, he said.

"However, as inhabitants in rural areas accounted for almost three fourths of the country's population, the potential of the rural market can not be overlooked," he said.

NEW ENERGY CAR

New energy cars has also brought fresh impetus to China's auto market with cheaper prices and low emission.

The Foton Chinese Index for Mobility showed that 23 percent of the interviewees were willing to buy automobiles of hybrid power, the figure for electric vehicles was 10.1 percent.

Up to 36.5 percent hope that the government would subsidize new energy car purchases, said the survey.

Jia said that the government should promote new energy cars, and develop low speed ones.

"In cities, a car with an average speed of about 25 miles per hour is enough for people to go back and forth between homes and work places," Jia said.

He is quite confident in the future development of the new energy car market. "Low speed new energy cars are cheap and power saving. They are environmental friendly and has huge market potential."