China car sales reach record high

Beijing/Shanghai, April 9 – Vehicle sales in China, the world's largest car market, climbed to a record in March, extending gains from the previous month, helped by government policy measures to bolster demand in both urban and rural areas.

A total of 1.10m vehicles was sold last month, up from 1.06m in March 2008, which previously posted the highest monthly sales, data from the China Association of Automobile Manufacturers showed on Thursday.

”Few had expected such an explosive growth for the month. I certainly didn't as the economy had not shown clear signs of full recovery,” said Yi Junfeng, an industry analyst with Changjiang Securities.

”It seems that the tax incentives for small cars and subsidies are really effective and the 10 per cent annual growth target set by the government is achievable.”

China's auto market has received a strong boost since February from government policy support measures, including tax incentives for small cars and subsidies.

The country's vehicle sales growth slowed in 2008 to its lowest annual rate in more than a decade as the global financial crisis took its toll.

Chery Automobile, maker of China's best-selling compact car QQ, sold more than 35,000 cars in March, hitting its second monthly record this year, it said on its website.

Ford Motor also expects to grow faster than the overall China market this year, banking in part on policy support to lift sales of its new Fiesta small car rolled out last month.

China's overall passenger car sales also hit a monthly high of 772,400 units in March, up 10.26 per cent from a year earlier, and a rise of 27.2 per cent from February, official data showed.

To tap the potential of the country's vast rural areas, Beijing also promised to subsidise farmers who trade in high-emission light vehicles for clean and fuel-efficient ones.

That has helped push up sales of General Motors' light commercial vehicle venture in South China by 38.1 per cent from a year earlier to 90,784 units in March, the Shanghai Securities News said on Thursday.