According to the official Xinhua news agency China sold more than 13.5 million vehicles in 2009 including 10.3 million passenger vehicles, overtaking the US to become the world’s largest car market and a whopping 42 per cent increase on 2008.
Industry observers attributed China’s strong car sales largely to government policy initiatives, such as slashing taxes on cars with engines smaller than 1.6 litres and subsidising clean-technology vehicles. The government also subsidised auto purchases for farmers, which had effectively lifted market sentiment and attracted buyers back to showrooms.
The country’s official car sales data for 2009 is scheduled to be released by the China Association of Automobile Manufacturers next week, but the figure reported by Xinhua is in line with analysts’ expectations.
The Chinese sales figures compared with the annual lowest sales for 27 years of 10.4 million cars and light trucks in the US, means it was the first time any country bought more cars than Americans.. The figures reached were also well above the 10 million in vehicle sales that China had originally targeted for 2009.
China has been a been a source of good economic news amid the global car industry recession and a safe haven for battered industry giants such as GM and Ford along with the not so battered VW.
The market is likely to return to a slower but more rational growth rate of roughly 10 percent in 2010 on continued policy support from the government even though the renewed tax incentives for small cars were not as aggressive as expected, analysts said.