October 23, 2007


Chinese passenger car market now second in the world, report says

Beijing, China – Passenger cars are fast becoming a necessity in China, with the Chinese government taking active steps such as lowering the tariff on imported cars to propel the market, according to a new report from Frost & Sullivan. In 2006, China overtook Japan to become the second-largest automotive consumer in the world

The report says that the total sales volume of passenger cars in China has jumped from about 1.2 million in 2001, to over 5.17 million in 2006.

The reduction in tariffs will enable foreign companies to slash their prices and compete with domestic carmakers in China; meanwhile, new rules on the qualification evaluation of car dealerships will ensure the elimination of car dealers without authentic authorization, aiding fair competition in the market. The State Council has a mandate to rationalize the structure of the automotive industry, in order to curb irrational expansion of production; these factors are expected to go a long way in accelerating the passenger car market’s development, the report says.

Sales of passenger cars and commercial vehicles are expected to increase by 22 and 7.8 per cent, respectively, to 6.30 million and 2.20 million sales in 2007. At 74 per cent, sedans claimed the largest market share, followed by minibuses, sport utility vehicles and multi-purpose vehicles.

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