Economy

China overtakes US as world's largest auto market

(Agencies)
Updated: 2010-01-11 22:07

PARIS: China's auto sales surged past the United States to reach record levels in 2009, industry figures showed on Monday, underscoring China's importance to the global auto industry as the world's biggest market.

China overtakes US as world's largest auto market

New cars are seen at a parking lot of GM car park in Shanghai January 11, 2010. [Agencies]?

The figures came as PSA Peugeot Citroen (PEUP.PA) of France said markets were expected to show signs of recovery around the world in 2010, while Volkswagen AG (VOWG_p.DE) (VOWG.DE) said it aims to at least double its US sales in coming years.

After a year in which Chinese automakers made key acquisitions abroad, Beijing's renewed incentives to bolster demand will likely keep it as a bright spot for car makers battered by the financial crisis.

Vehicle sales in the country came to a record 13.6 million units in 2009, marking an increase of 46.15 percent from the 9.4 million units sold in 2008, the China Association of Automobile Manufacturers said, well above a previous target of 10 million units and compared with annual sales of 10.4 million cars and light trucks in the United States, the lowest level in 27 years.

The Chinese tally, which also includes heavy vehicles, is still higher than that of the United States after deducting roughly 650,000 units of heavy trucks, Orient Securities said.

"Sales have been extremely hot in most parts of last year with little seasonal changes. Many people have to wait for weeks or even months to get their cars," said Qin Xuwen, an analyst at Orient.

The past year has seen Chinese automakers venturing on to the global stage for the first time in a major way, ready to snap up brands such as Volvo and Hummer which they previously admired from afar.

"We are still optimistic about the outlook for this year but it will be quite difficult to achieve the growth rates of 2009," said John Zeng, a Shanghai-based analyst at IHS Global Insight.

"This year will see a high single-digits growth rate of nine to 10 percent."

Sedans made up 56 percent of total auto sales in 2009, with Shanghai Volkswagen, a joint venture between Volkswagen AG and China's SAIC, selling the most, Xinhua said in a separate brief dispatch without identifying its source.

Several foreign auto manufacturers last week reported massive increases in their China sales -- in contrast with sharp falls in their home markets.

US auto giant General Motors said sales surged 66.9 percent to 1.83 million vehicles in 2009, while Ford Motor Company and its Chinese partners said sales rose 44 percent to more than 440,000 units.

Volkswagen, the biggest European carmaker, said its Chinese sales soared 36.7 percent to a record 1.4 million vehicles.

Auto sales have surged in recent years due to rising incomes that have put private car ownership -- once an unthinkable luxury -- within reach for millions.

In Beijing alone, the number of registered cars topped four million in December, meaning a quarter of the capital's 16 million permanent residents have cars.

Government incentives included slashing taxes on cars with engines smaller than 1.6 litres and subsidising clean-technology vehicles. The government also subsidised auto purchases for farmers.