It will come as little surprise that car sales in China have once again risen year-on-year this October.
Beijing’s stimulus package has caused first time car buyers to flock to the showrooms, while China’s increasingly wealthy upper classes continue to fuel the luxury market.
Although actual sales fell in October compared to September and boom-month August, they continue to far exceed last year’s level, with General Motors and BMW boasting of an ongoing hike in sales between January and October.
Of course, the question on everyone’s lips is whether the Chinese market is sustainable, especially given the fact that Beijing’s tax breaks on vehicles under 1.6 liters – which accounted for 70% of sales in September – are due to end on December 31. Then there is the question of whether China will eventually run out of people who have the resources and the desire to buy their own cars.
Industry insiders are quick to refute both counts. Not only have the state media inferred that the government intends to extend it’s stimulus support, but the potential market in China is nowhere near exhausted as we approach the end of 2009.
In the words of Zhang Xiangmu, director of equipment manufacturing industries at the Ministry of Industry and Information Technology: "In terms of total vehicles produced and sold, China’s figure is not too high compared to the United States, Europe and Japan."
If the speculation turns out to be true, car manufacturers in China will be able to keep their feet on the gas for a good while longer.