China takes care of 2010

By Malini Hariharan

After sorting out 2009 with a huge stimulus package the Chinese government is busy ensuring that there will be no slowdown next year.

A number of measures have been announced to sustain growth in the domestic market. Subsidies on sales on home appliances in rural areas are being extended.

The auto sector will continue to be supported – tax cuts that were due to end in December will be extended. Subsidies are being expanded for purchases of alternative fuel vehicles, purchases in rural areas and for consumers trading in old cars.

Does this mean even higher auto sales in the coming months?

Pic source: China Digital Times
Sales and production crossed the one million mark in November. Sales of cars, sports-utility vehicles and minivans rose to 1.04m while total vehicle sales touched 1.34m, up 96% from the previous year.

A comparison with November 2008 is perhaps not very relevant, as the Chinese government had not unveiled its stimulus package or the auto subsidy program at that time. But both sales and production last month were higher than October which suggests that the subsidy program is still a big draw.

The Secretary General of the China Passenger Car Association says that 2009 will be an ‘unprecedented year in any country’s auto industry’. The Association has projected total vehicle sales to cross 13m in 2009, up from 9.38m in 2008.

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