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China Record Stupendous Auto Sales in March 2009
Apr 27, 2009

Sales of automobiles in China struck record 1.1 Million Units in March 2009 on account of government stimulus policies including tax cuts and subsidies.

According the statement of China Association of Automobile Manufacturers (CAAM), automobile sales in China, which is the largest car market in the world, surged to a record figure in March 2009, as reported by  Reuters.

T
he total automobile sale recorded in March 2009 was 1.1 Million Units, higher than the sales of 1.06 Million vehicles recorded in March 2008 that was previously the highest sales for the month. The sales in Q1 2009 aggregated around 2.67 Million Units. Out of the total automobile sales, sales of vehicles with 1.6 Liters or less capacity engines constituted approx 70%.

In January and February 2009, there was an 18.78% YOY increase in the sales of small cars having 1.6 or less capacity engines whereas a decrease of 17.32% was observed in the sales of cars having 1.6 to 2.0 Liters engine capacity.

The surge in auto sales is mainly due to the stimulus policies of the government. Retail taxes on small cars have been slashed to half. The government is also planning to grant vehicle subsidies of worth 5 Billion Yuan to the rural areas in an effort to boost the automobile consumption. These efforts are assisting consumers to regain their confidence and return back to the automobile purchase. Besides, Chinese automobile market has been boosted by the government support initiatives since February 2009.

I
n 2009, China is planning to attain the target of 10 Million Units in terms of both output and sales of vehicles. It is also targeting to achieve an average growth of 10% for the automobile industry in the coming three years.

Considering the great efforts of the Chinese manufacturers to attain the mark of 10 Million Units, it looks that China could probably achieve its goal. Chinese auto manufacturers are making hefty investments in ventures with foreign key players as well as in new technology while also introducing alternative fuel vehicle or electric vehicle. However, some industry experts are maintaining caution as March is typically regarded as a peak season for the auto sales in China. 

According to a Research Analyst at RNCOS, "The government's stimulus policies helped the Chinese auto sector to recover and also, the market confidence is slowly restoring. The total automobile sales could touch the mark of 10 Million Units in 2009, provided the favorable market conditions continue persisting."

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