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Global gaze on record China sales
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Despite gloomy international sales, whether in Western countries or emerging economies, the still-robust Chinese auto market currently offers the brightest prospects for global automobile manufacturers to offset their losses at home.

China's auto sales in 2009 may break the 10-million barrier and overtake the US. [China Daily]
China's auto sales in 2009 may break the 10-million barrier and overtake the US. [China Daily]

China has been the first to show improvement from the devastating industry downturn that began in second half of last year as it benefits from a series of government incentives to boost auto consumption.

"China might be the automobile market with the most potential in these hard times," said Hui Yumei, an analyst with automobile industry research company Sinotrust.

"The government's stimulus policies are starting to take effect."

The view is backed by Zhong Shi, an independent auto analyst based in Shanghai, who said "tax cuts and rebates for small car purchases lured buyers back to showrooms and relit consumption enthusiasm".

China halved retail taxes on small cars this year and plans supply 5 billion yuan for vehicle subsidies in rural areas to drive auto sales after growth rose at the slowest pace in a decade last year, when 9.38 million units were sold, an increase of 6.7 percent over 2007.

The stimulus package was felt in the first quarter, when domestic sales surpassed the waning US market for three months in a row, giving China the temporary title of top auto market in the world.

The country even reached a monthly sales record of 1.11 million vehicles in March, 34.1 percent more than in February, and a 5 percent year-on-year increase.

That compares with a plummet of more than 30 percent in US for the period, when 2.2 million vehicles were sold.

"China's auto sales in 2009 may break the 10-million barrier and overtake the US as the world's largest automobile market for the entire year," noted Mei Songlin, deputy general manager of J.D. Power Asia-Pacific.

The growth in China provides provide global automakers the confidence to further develop and invest in China in a big way.

While cutting back on budgets in other auto shows this year, major multinational automakers' zest for the 13th Shanghai International Automobile Industry Exhibition is illustrated by the number of participants and the size of their booths and pavilions.

The show has attracted 1,500 automakers and parts manufacturers from 25 countries and regions that have a combined display area of 170,000 sq m, a rise of 20 percent over the last session.

Thirteen new cars from multinational makers will make their global debuts at the Shanghai show, according to Wang Xia, vice-chairman of the Automobile Sub-council of the China Council for the Promotion of International Trade.

"Of course global carmakers are facing very difficult times, and it is clear they will save money on shows in markets that are collapsing and have problems," said Harald Muller, CEO of German expo organizer IMAG.

"But China is still the market that is increasing, so they will concentrate on one or two major auto shows this year, and the Shanghai show is definitely one them."

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