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China to leave US behind in 09 Auto Sales
Oct 07, 2009

China’s automobile sales are projected to hit 12.6 Million Units in 2009 due to tax cuts and subsidies granted by the government.
As per the statement of Xu Changming, senior economist at the Cabinet’s State Information Center, China’s automobile sales should reach 12.6 Million Units in 2009, increasing 35% from 2008, reported Passenger car sales are anticipated to climb up to 7.9 Million Units this year, 38.7% up from 2008.
As of August 2009, China spearheaded the world in terms of automobile sales for 2009 by selling 8.33 Million Units as compared to 7.1 Million Units sold by the US. In September 2009, automobile sales in China are estimated to total 1.25 Million Units. Further, sales are expected to grow by a minimum of 15% annually over the following decade.
The growth predictions are based on the subsidies which the industry is urging the government to extend. The subsidies and tax cuts are going to expire by the end of this year. The government’s decision in this regard is to come up in mid-December. The extension of policy to 2010 will help in sustaining the rapid growth of automobile sales. Otherwise, fluctuation in sales will be seen whose degree is hard to predict.
The government introduced sales tax cut with engines smaller than 1.6 Liters. Moreover, government is granting subsidies on rural sales as part of its efforts to revive the industry, and the trend is expected to continue in coming years.
Incessant economic recovery and rising consumer confidence are also working in favor of the industry’s growth. Robust economic performance in past years has boosted the country’s economy. Purchasing power of Chinese consumers has surged rapidly over the past years, and the trend will continue in future, says “China Automobile Sector Forecast to 2012”, a market research report by RNCOS.
According to a Research Analyst at RNCOS, “China has maintained to be among the largest auto markets in the world despite the economic recession. The growth in Chinese automobile industry is stimulating automakers from around the world to look upon China in order to drive their revenues amid low demand elsewhere. So, China is expected to outperform the US to become the largest car market for the whole year of 2009.”
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