China: Imports Expected to Climb 20 Percent

(chinatrucks.com, Feb.09, 2010)Industry observers say vehicle imports into China should continue their rebound in a healing global economic picture.

Imports of vehicles into China are expected to climb 20 percent to 420,000 units this year, an industry insider has said. Of the sectors, sport-utility vehicles contributed the most to the growth. Last year, SUV imports rose 37 percent and accounted for 54.8 percent of total imported vehicles.

Auto imports began to rebound in the second half of last year, thanks to a recovering Chinese economy and higher demand in second- and third-tier cities, said Ding Hongxiang, chairman of China Automobile Trading Co.

"We have seen notable sales growth in Shaanxi, Hebei and Inner Mongolia," Ding said. "The rising economic strength in smaller cities has generated consumption power, which will bring significant growth to the overall imported vehicle market."

After maintaining a sales increase of more than 40 percent since 2006, last year's growth in China's imported auto sales slowed to 31 percent on an annual basis for a total of 353,000 units. Imports at customs rose only 2.8 percent, to 419,000 units, last year.

This was due to the combination of the global financial crisis and a higher consumption tax on imported cars with engine capacities larger than 3.0 liters.

The Chinese government's stimulus measures also failed to support the imported-car segment.

"Although carmakers increased local production, imported vehicles are still attractive to consumers for their individual features," Ding said.

"I expect the demand in big cities will also recover, and carmakers will place more attention on vehicles with mid-size engine capacity this year," Ding noted.

Last year, imported vehicles sold in second- and third-tier cities took up 53 percent of the total. Carmakers including Ferrari and Porsche have accelerated new-product launches.

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