China Car Sales: One Million First Time Ever

SHANGHAI, Dec 16, 2002; Reuters reported that annual car sales in China, the world's fastest growing auto market, have topped the one million mark for the first time, a source at the official automobile industry association said on Monday.

The official at the China Association of Automobile Manufacturers told Reuters 1.02 million cars were sold in China in the first 11 months of this year, representing a 55.4 percent jump from the same period in 2001.

The faster-than-expected growth is attributed to a rising urban middle class with increasing spending power, plus an unprecedented range of economy cars hitting the market this year, industry executives and analysts said.

They expect sales in China of around 1.1 million cars for the full year, up from 721,000 in 2001.

But while auto demand is expected to climb steadily as sturdy economic growth of around eight percent lines the pockets of more Chinese families, industry experts said this year's heady jump was unlikely to be repeated.

"I don't think there's any way you're going to see 40 percent growth again next year," General Motors <GM.N> China Chairman Philip Murtaugh said earlier this month.

"I think growth in the 10 to 15 percent range over a five-year period is certainly feasible assuming that the overall economy continues to grow in the seven to eight percent range," said the executive of the world's largest auto company.

Market leader Volkswagen AG, which sells 40 percent of all cars in China, said last week car demand is expected to rise 20 to 30 percent in the country next year.

China's car producers, which includes the joint ventures of foreign brands like Volkswagen and General Motors, rolled out 974,000 cars in the January to November period, the automobile association official said.

That represented a 51.4 percent jump year on year.