Auto Sales in 2010 May Grow by 8% to 15%

Undoubtedly, the year of 2009 is a special period when China's automobile undergone an explosive growth. More than 13 million units’ sales and the growth rate of 40% made China become the No.1 market in the world, surpassing the United States. Stimulated by growth of sales, a great number of car companies have set a higher sales plan, some of which even increased their sales targets by above 150%. Therefore the domestic total production capacity is expected to reach about 20 million. However, the great leap of China's auto enterprises gives rise to people's concern that whether the blowout, which took place in 2009, will be the result in 2010. There is a great deal of uncertainties.

First of all, the dramatic growth of car market in 2009 partly overdraft the consuming potential which is to be explored in future next few years. In addition, the acquisition tax was reduced by a smaller range, which will have impact on consumers' decision to buy a car. The rising of fuel price is predicted to happen, together with higher cost of use of cars. What's more, excess capacity is a reality requiring to be coped with. The change of relationship between the basic supply and demand will not only take its effects the terminal price, but also postpone someone's purchasing time. The sales assumed by the industry will be between 8% and 15%. On the contrary, the increase of production capacity will be 40% or so. Therefore, it can be concluded that the auto market this year is not that reliable.

Nevertheless, there are still some spotlights to catch in 2010. Joint venture enterprises to seize the low-end car market, efforts of independent brand to march in the high-end market. The competition has becoming increasingly fierce. Besides, the second and third-tier markets are expected to maintain a rapid growth; a new growth point in future’s domestic market. We still have to unveil so many answers about how China's car market will be like in 2010 until the time arrives. (Translate: Qinghua/Sailor)

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