DEVELOPMENT OF CHINA'S AUTOMOTIVE MARKET

China's passenger vehicle market ended last year with a 59 percent year-on-year sales increase to surpass the United States as the world's largest auto market for the first year, thanks to the central government's stimulus package.

The number of vehicle sales was largely boosted by the governments's stimulus policies for lifting market demand, which included tax cuts on small-displacement automobiles, subsidies for tradeins and subsidies for farmers to buy vehicles.

To further support the world's fastest growing auto market, the Chinese government said last month it will extend stimulus measures in the automobile industry for one more year.

The government's continued support for the industry promises to fuel its rise for the coming years.

Automobile industry consulting firm Sinotrust predicted that vehicle sales will reach 15.13 million units this year, with a year-on-year growth rate of 15.2 %.

Accoring to the Ministry of Public Security, until the end of last year, almost 200 million Chinese people are able to drive a vehicle, making up about 15 % of the country's 1.3 billion population.

Natural demand will continue to expand in the next few years.



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