FOR THE first time, car sales in January in China overtook those of the US.
Data from the China Association of Automobile Manufacturers showed that 735,000 cars were sold in China last month, compared to 656,976 vehicles sold in the US.
The slump in car sales in the US is badly hitting the industry, forcing government intervention to prop up the key sector.
The figure in China was down 14.4 per cent from a record of 860,000 a year earlier, but is a much smaller decline than in the US where sales were down 37 per cent to a 26-year low.
Foreign cars are much in favour – China’s best-selling car-makers are GM and Volkswagen, with strong competition from Toyota and Hyundai. However domestic carmakers such as Chery and Xiali continue to command a growing share of the market.
GM said it sold a record 1.09 million vehicles in China last year, up 6 per cent from 2007.
While the US remains the world’s biggest car market, the figures are something of a sign of how the industry is changing.
The data shows how China’s growing financial muscle is translating into real opportunities for car companies, particularly foreign brands which are favoured by Chinese consumers.
China, with a population of 1.3 billion, overtook Japan in 2006 as the world’s second largest market by annual sales.
The US has 800 cars for every 1,000 people, while China still has only 20 per 1,000 people, so clearly the growth market is in China.
The market in China has been growing by 20 per cent a year, although that fell to 10 per cent last year and is expected to fall further this year.
The fiscal stimulus package to boost the Chinese economy has given the auto industry a boost.
As part of the plan, tax on vehicles with smaller engines (less than 1.6 litres) has been halved to 5 per cent and subsidies for those exchanging old vehicles for a new car have been introduced.
The government has also promised to provide 10 billion yuan (€1.13 billion) to help carmakers upgrade their technology and to develop alternative energy sources for cars and trucks.
