Owing to a series of industry and market support measures that the government applied, it unprecedentedly breaks the record last month and China outstrips the US in automobile sales.

In February 10, China Association of Automobile Manufacturers (CAAM) said that China sold totally 735,500 units of vehicles in January, 14.5 percent less year-on-year because of the falling demand, and, compared with December, it drops slightly 0.83 percent. However, it is still well over that in the US. Statistics shows that automobile’s monthly sales in the US dropped 37 percent from the last January to about 656,693 vehicles, which was the lowest point since 1963.

Associate Secretary General of CAAM Zhu Yiping said that the encouraging sales figures in January showed how effectively the new government policies work in the promotion of vehicle sales.

Since the January sales of 2008forecast doom prosperity of the market, the high stock of domestic ran down as the producers of automobile reduced the production while the demand for the product increased without expectation.

According to the association, automobile inventories declined more than 80,000 units and down to the new low in the recent 13 months.

There was an output of 658,800 units of vehicles last month in China, 20.22 percent less than that in a year earlier, but 5.07 percent more than that in December.

A stimulus package was passed last month, according to which tax on vehicles with engine capacity of less than 1.6 liters will be cut by 50 percent and 5 million yuan on subsidies will be spent for farmer to replace three-wheeled vehicles and outdated trucks with small, 1.3-liter or less, vehicles. The action is taken in the purpose of getting automobile sales in rural regions forward and put spurs to more energy efficient vehicles. Therefore, the only kind of automobile with rising sales in the auto section in January would be the small passenger cars, with engine capacity of less than 1.6 liters.

In the expectation of Ricon Xia, auto analyst at Daiwa Securities, the tax adjusted would increase the automobile sales by 3 – 6 percent this year.

Yale Zhang, director, Greater China Vehicle Forecasts for US consultancy CSM Worldwide Corp. believed that the measures adopted was to make enormous progress in the sales, and the automobile market in China is to be refreshed in the later part of this year. However, he added that no conclusion could be obtained just on the base of a monthly figure that China had become the leading automobile market in the world.

And, Jia Xinguang, an auto analyst based in Beijing, stated that it made little sense to be the one-month-sales winner as it was groundless of comparing China’s auto industry with the US’ just with a monthly figure, and China should attach greater importance to implement a minute restructured scheme in the long run.

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automobile, China, economy, industry, market, sales, U.S.