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China auto market may become world's largest
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The global auto industry has been hit hard by the financial crisis. But China's auto industry has found opportunities in the past year. Its auto production and sales will likely be the largest in the world by the end of this year, mainly due to the government's favorable policies.

China Brilliance Auto is increasing production to meet rising sales. This production line now runs 20 hours a day, even on weekends. A line production manager says the original plan was to produce 54 thousand vehicles this year, but now they are increasing it to 80 thousand.

Qi Yumin, Chairman of Brilliance Auto said "It's a fact that China has surpassed the US in auto production and sales. The sales of our company will reach between 11 million to 12 million this year."

According to the National Development and Reform Commission, China's auto industry has rebounded this year. Some models are even in short supply and are unable to meet demand. Beijing sold 60 thousand vehicles in August, a record high. Sales at a Wuhan car dealership surged by 50 percent, while one of Yantai's car markets increased by one quarter.

Dong Yang, Standing Deputy Chairman of China Assoc. of Automobile Manufacturers said "May to August is usually a low season for car sales, but last month sales across the countries hit 1.1 million units. The record highs benefit the whole auto industry and 100 other subsidiary industries. The large volume of sales were possible due to favorable policies and China's economic foundation."

According to Dong, it's the sixth month in a row that auto sales surpassed one million. In the first eight months of this year, production and sales in China's Auto Industry increased by more than one quarter year on year. It's estimated that China will become the world's largest auto market in terms of production and sales this year.

The increase in both production and sales come on the heels of the government stimulus plan. Experts predict the country will likely sell 2 million more vehicles compared to the previous year. Analysts estimate that government policies drove more than half of the 2 million cars purchases.

Chen Bin, Director of Department of Industry of NDRC said "Continuous economic growth has generated great demand in the auto industry. The government reduced the purchase tax for small emission cars, and so the sales of vehicles below 1.6 liters increased a lot."

Officials say that sales of small emission cars accounted for 70 percent of overall sales, hitting more than 4.3 million units from January to August. Aside from tax reductions, the government's subsidy policy in rural areas has also developed a great potential market.

Shen Jinjun, Standing Deputy Director of China Automobile Dealers Association said "The increase in rural areas has made a great contribution to the whole market. The sales of small passenger cars in rural areas increased by more than 150 percent in August and by more than 60 percent from January to August year on year."

Experts predict that the country's stimulus plan will help generate more than 125 billion yuan for the auto industry this year.

(CCTV September 17, 2009)

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