Auto Consumption Becomes Chinese Consumption Hotspot of 2009


On December 28th, 2009, Chinese Ministry of Commerce published the article “Auto Consumption Becomes Chinese Consumption Hotspot of 2009”. The article summarizes the four major characteristics of Chinese auto market as follows: 1. The auto consumption shows an optimistic situation. China Motorcycles manufacturer The auto industry recovers prominently. 2. Low-emission autos increase rapidly with prominent market share growth. 3. Rural auto consumption is enlarged. The structure adjustment sees preliminary effect. 4. Second-hand vehicle trading rises stably with great development potential.


The report believes that Chinese auto consumption market can remain the optimistic development trend in 2010. The reasons are follows: 1. There is great potential in Chinese domestic auto consumption. 2. Various favorable policies will continue to be implemented: the “auto going to the countryside” policy will be extended to the end of 2010. The “motorcycle going to the countryside” policy subsumed in the “auto going to the countryside” subsidy channel will be extended to January 31st, 2013. The purchase tax reduction policy for passenger cars (?1.6 liters emission) will be prolonged China Motorcycles manufacturer to the end of 2010 with the tax rate of 7.5%. The old for new policy of autos will continue to be implemented; the subsidy amount standard for a single vehicle is increased to RMB 5,000 to RMB 18,000. 3. Expanding the domestic demand, especially residents’ consumption is the major task of Chinese government in the economic work of 2010. The auto consumption should continue to play the vital role as it is a major part in the domestic demand expansion.

In the previous 11 months of 2009, the sales volume of Chinese passenger cars (?1.6 liters emission) was 6.43 million, rising by 67.7% YOY. The volume took up 70% of the total sales volume of passenger cars and over 50% of the total sales volume of autos, both proportions increasing by nearly 8% YOY. The market share of low-emission passenger cars is increasing rapidly, indicating more rational consumption of Chinese residents. This will help to realize the energy saving, emission reduction and sustained development of the auto consumption market.

In the previous 11 months of 2009, the total subsidized volume of autos and China Motorcycles for the countryside by Chinese government reached 4.19 million with the cashed funds of RMB 6.1 billion. Among that, the subsidized volumes of autos and China Motorcycles manufacturer were 1.17 million and 3.02 million separately. The autos and China Motorcycles going to the countryside policy plays a positive role in stimulating the rural consumption, improving the rural auto consumption structure, promoting the upgrading of rural transportation means, improving the living standard of rural residents and accelerating the building of a new socialist countryside. According to statistics, the sales volume of the main auto type in the auto going to the countryside policy — crossover passenger cars (mainly minibuses) exceeded 1.6 million in the previous 11 months of 2009. It is predicted that the sales volume of various autos will exceed 2 million in Chinese countryside, rising by over 80% YOY in 2009.

In 2009, Chinese new vehicle consumption market rose continuously with a high speed, vitalizing the second-hand vehicle market. From January to October of 2009, the trading volume of Chinese second-hand vehicle was near 3 million, rising by 28% YOY. The trading volume is estimated to reach 3.6 million in the whole year of 2009.


In 2009, Chinese domestic brand cars grew gradually. In 2010, the sales volume of Chinese domestic brand cars is expected to rise continuously. Chinese domestic brand cars displayed the development potential in 2009. 1. In the previous 11 months of 2009, the sales volume of BYD F3 cars was 255,000, ranking the first. China Motorcycles manufacturer The domestic-brand car — Chery QQ (sales volume: 152,000, ranking the eighth) was also among the Top 10 in Chinese car sales volume in the previous 11 months of 2009. 2. In 2009, the monthly sales volumes of domestic-brand auto models such as Roewe 550 of SAIC Motor, Alsvin of ChangAn Automobile and Tojoy of JAC Motors exceeded 5,000. If Chinese car market continues the prosperous development, the domestic-brand auto sales volumes of all the above companies will surpass 150,000. Chinese domestic-brand car enterprises will realize breakeven in 2010.

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