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Automotive industry

A different picture of mainland car sales

3-MIN READ3-MIN
Tom Holland

At some point this week, the China Automobile Manufacturers Association is expected to announce mainland car sales figures for last year.

The number will be a humdinger. Extrapolating from figures for the first 11 months, we can expect to see whole-year sales of 13.5 million vehicles, up an enormous 44 per cent from 2008.

As the first of the two charts below shows, by far the bulk of last year's sales consisted of ordinary passenger cars. Again projecting from data from the first 11 months of the year, we can confidently estimate that mainland dealers shifted a little over 10 million saloons, hatchbacks and minicars in 2009, an astonishing 51 per cent more than in the previous year.

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What's more, many investors anticipate a similarly strong sales performance this year.

With China's per-capita gross domestic product set to top US$3,500 last year, analysts note that the mainland has now entered the wealth bracket in which car sales exploded in other Asian markets including Japan and South Korea.

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Car ownership levels may already be relatively high in the rich coastal cities of eastern China, but over the next few years, continued economic growth promises to bring the cost of a small car within the reach of tens of millions of inhabitants of the mainland's second-tier inland cities. With developing consumer finance options set to make cars even more affordable - at the moment, fewer than 20 per cent of car purchases are funded through loans - investors are expecting a sales bonanza for China's carmakers this year.

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