CRI听力: Heat On The Chinese Car Market

While the global economy is looking gloomy, the Chinese car market is basking in sunshine. According to an official survey conducted by Chinese vehicle market analysts, in August, the monthly number of cars being sold in Beijing has reached 60,000, an all-time high. August was the eighth month this year to see sales of 1 million cars in China, where total car sales reached 8.3 million, a nearly 30% growth on the previous year.

Qi Yuming, a board chairman with 'Brilliant Auto' says a total of 11 to 12 million car can be sold by the end of this year. China, it seems, has become the biggest car market in the world.

"We have outstripped the US in the numbers of cars produced and sold, that is an undeniable fact. Our market is healthy and more demand is still expected."(www.hxen.net)

Government policies to encourage people to purchase cars can be seen as one explanation for the rising car market.

When the market went through its low points in 2008, the government issued a series of policies, one being to reduce car tax by 5% on the cars with 1.6 liter engines.

This policy triggered the market's rise, but according to Chen Bin from the National Development and Reform Commission, the policy was only one force driving the market. The climb of general social economical standard and people's incomes are essential foundations for a long-term success.

"Years of economic development resulted in both the capability and the demand for purchasing cars. It is the very foundation for the car market to rise up, while policies help accelerate the process."

Chen Bin says the policy of tax cuts has resulted in a huge sales growth for cars with a 1.6 liter engine or less. Their market share has increased 10% in the last eight months, and the direct beneficiaries of this are the Chinese home car manufacturers, whose business largely relies on small cars sold at cheap prices.

Yin Tongyue, the general manager of Chery Automobile, says the policy made this year a very good year for Chinese made cars.

"Since 2006, market share for Chinese car manufactures decreases constantly, but this year we are having a tremendous increase, our sales climbed 30% over the first eight months, all resulting from the policy."

Policies from the government can be effective for seasonal market adjustments, but once they run out of efficiency, like the small displacement policy ??? which will expire on December 12th, Chinese manufactures will have to rely on themselves for continued growth.

Chinese manufactures such as Brilliance Auto, Chery and Geely are teaming up with foreign car manufactures, under a partnership to share the Chinese market and foreign technology.

The government's policy put those home manufactures on the road, but to go any further, they have to steer their own course.

From China Drive, I'm Huang Rui