An official from the Chinese Ministry of Commerce said on Friday that China’s 2010 car sales could reach 15 million units, achieving double-digit growth.
Supported by government incentives, China's auto sales in 2009 increased by nearly 50%, making China more than the US to become the world's largest auto market. Some analysts have said that China's car sales in 2010 will be significantly slowed down, because the government's stimulus measures last year overdrafted future demand, the impact of the small car market will be particularly serious.
However, Chang Xiaocun, director of the Market System Construction Department of the Ministry of Commerce, said that he is optimistic about the sales situation this year. It is expected that automobile sales will remain strong, due to the increase in residents' income and the extension of the auto industry support measures. Chang Xiaocun said at a news conference that China's goal is to sell 15 million cars. He believes that achieving double-digit growth is not difficult, but the increase will not be as high as last year.
Global automakers expect China's sales to increase by 10% to 15% this year, an increase of less than 46% last year. Last year, sales were 13.6 million units. According to JD Power, US car sales are expected to increase by about 12% this year. Last year, US light vehicle sales were about 10.4 million units.
The Chinese government has reduced the tax cuts on purchases of engines with a displacement of 1.6 liters or less this year, but extended the time limit for subsidizing some vehicles in rural areas. The Chinese government will also increase the subsidy for replacing old and highly polluting vehicles from RMB 3,000 to RMB 6,000 per unit to RMB 5,000 to RMB 18,000.
The current tax rate for purchasing small cars has increased from 5% in 2009 to 7.5%, but still below the normal rate of 10%.
Chang Xiaocun said that China will undoubtedly increase subsidies and promote rural consumption and car purchase this year. He said that last year the government allocated more than 20 billion yuan for such subsidies.
Chang Xiaocun said on Friday that although the number of cars in big cities such as Beijing has reached a high level, there is still room for growth in domestic car sales. He also said that the surge in car sales last year was a personal demand, not a government procurement demand that some observers speculated.
According to a statement released at the press conference, sales of China's engine displacements of 1.6 liters and below increased by 71% in 2009 to 7.2 million units. Car sales in rural areas increased by 85% to more than 2 million.
According to the statement, China's used car market is also growing, with transaction volume increasing 28% last year to 4.1 million units.  

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