China Feb Car Output Up 62.1% At 181,600

SHANGHAI March 15, 2004; Jane Lanhee Lee writing for Dow Jones reported that production of passenger cars in China rose 62.1% to 181, 600 units in February, the country's National Bureau of Statistics said Monday.

In the first two months, passenger car production rose 35.7% to 325,400, the bureau said.

However, the bureau said China's automobile market will face challenges in coming months following the rapid growth of the past two years. Defaults on auto loans in 2003, which have led to stricter criteria for loans, could hurt vehicle sales this year, it said.

In addition, the bureau said that the auto market was becoming more fragmented, limiting the future expansion of companies with major joint ventures in China like Volkswagen AG .

It said that even among the companies posting the fastest growth in 2004, sales will increase at a slower rate than last year.

The bureau said it expects some volatility in auto production this year.

Passenger car production in China last year soared 80.7% to 2.07 million units. According to the China Association of Automobile Manufacturers, a record 1.97 million locally made passenger cars were sold last year, up 75.3% from 2002.

Web site:http://stats.gov.cn