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Car Sales Rose by 17.84% from Jan to Apr 2008 in China
Jul 03, 2008

According to CAAM, despite facing severe winter, sales of passenger cars in China increased by about 17.84% during the first four months of 2008.

CAAM (China Association of Automobile Manufacturers) revealed that in spite of severe winter season in China, the sales of passenger cars increased by about 17.84% during January to April 2008, as reported by
chinaview.

Moreover, in the first four months of 2008, sales of the Chinese passenger cars reached nearly 2.46 Million units, including around 141,300 sport-utility vehicles, about 75,500 mini-vans and nearly 1.81 Million sedans. Also, the total sales of vehicles reached about 604,900 cars in April 2008 alone, an increase of about 10.83% over April 2007, but fall of nearly 13.65% over March 2008, says CAAM.

The rise in disposable income with decline in prices of cars is encouraging most of the Chinese population, especially in interior mainland markets to purchase cars and it is identified as the main reason behind the growth of car market during January to April 2008. Also, the demand for cars is stemming from common people and second-tier cities.

Furthermore, the cultural reason that there is a strong link between cars and social status in the country is an important factor for growth of the industry. Due to a rise in spending power of Chinese urban elite class, a large number of people are purchasing top-quality products, such as cars. Also, China’s government has provided subsidies on fuel prices to keep the inflation under control, thereby releasing pressure from consumers and increasing the demand for passenger cars.

However, with an increase in car market, many foreign brands are dominating Chinese domestic car sector as all the global automobile giants have forged joint ventures in the country. Thus, the domestic small car makers have small share in the car sector and need to struggle in international car league.

A Research Analyst at
RNCOS said, “Car makers of China should develop strong development capabilities and brands to possess strong position in the market and to avoid any risk in future. Also, significant steps should be taken by the regulators to encourage more and more customers to purchase domestic brands of cars to boost development capabilities of car makers.”

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