Sales at Major Chinese Carmakers Rise 68% in 2009

Looking closely at a car with a beautiful design, Chinese people are no longer surprised to find that it's not a Mercedes or BMW, but a new model from the home-made Geely or Cherry.

In 2009, China's auto makers, on the whole, witnessed a 50 percent increase in car sales in the domestic market over the previous year. And this trend has showed no sign of a turn-around.

Liao Jibo tells the story.

Reporter:

Three days before the Chinese Lunar New Year, at a glass-ceilinged car dealership in downtown Beijing, about ten customers are combing for luxurious holiday gifts.

Sales manager Zhao Xiaoming says the store is offering many bonus deals for the holiday season.

"You can get a gas coupon worth 4,000 yuan and 2.5 percent more in tax cuts if you order a Cherry M1 before Saturday."

The China Association of Automobile Manufacturers, or CAAM, says more than 1.6 million domestic-brand cars were sold in China in January. That's roughly 17 percent more than last December and 220 percent higher than the same period last year.

Dong Yang, deputy chairman of CAAM, says orders far outnumbered the cars coming off assembly lines last year.

"Carmakers couldn't meet the soaring needs last year. Many customers had to wait until the New Year to get their cars, which resulted in a significant sales rise last month."

Boosted by tax cuts and other incentives to promote the sales of low-emissions cars in 2009, China's car sales reached nearly 14 million, overtaking the United States and becoming the world's top automaker and market.

Dong Yang with the CAAM is confident that China's car market will maintain a good performance this year.

"In 2010, the tax cut is set to be pulled down about 30 percent, but other incentives will still be kept, which means that the central government does not plan to withdraw its support for the car industry even though it has passed the lowest point of the economic crisis."

But for the carmakers, a bigger domestic market is not the only thing they want.

Geely Automobiles, the expected new owner of Volvo, was recognized in January by the central government for its contributions to technological innovation.
Head of the company Li Shufu says they are endeavoring to lead the industry in the future.

"We have taken over DSI Auto-transmission Company in Australia. The advanced technology brought about by the merger is like a seed that we can use to develop our own."

And for the Chinese people, buying domestic-brand cars in the future will mean many more advantages than just lower prices.

Liao Jibo, CRI news.