Passenger Car Sales Up 63 Percent in China in March

China's passenger car sales rose 63 percent in March 2010, a growth fueled by strong demand as a consequence of tax cuts and government subsidies, reports the Associated Press. 1.26 million automobiles were sold on the Chinese market last month, according to the China Association of Automobile Manufacturers. Last year China gained the status of the largest car market of the world, total vehicle sales amounting to 13.6 million units.

March figures seem to consolidate China's number one market title, as the U.S. can't match the growth in the Asian country (with sales rising by only 24 percent in March in the USA). Many Chinese customers are buying a car for the first time, whereas second-time car buyers upgrade to better, larger vehicles. Total vehicle sales in China rose 56 percent in March as compared to the same period last year to a number of 1.7 million units, bringing sales for the first three months of the year to 4.6 million.

"Passenger car sales turned out to be even better than earlier market estimates," said Rao Da, general secretary of another industry group, the Shanghai-based China Passenger Car Association, which released separate data showing similar trends. "We are confident that China's vehicle sales will surpass 17 million units this year, growing by about 25 percent," he added.

Automakers in China are running double shifts to meet demand and production of passenger cars rose 72 percent from a year earlier in March, to 1.3 million units, the CAAM reported. First quarter production increased by 84 percent to 3.5 million units. The best sold cars in March were those with 1.6 liter engines or less: 868,300 units, or 69 percent of total passenger car sales. However, Chinese exports are insignificant compared to domestic sales, only 39,500 units being sold abroad in March.