Wednesday, July 08, 2009

Chinese car boom could last a few years

HONG KONG (Reuters) - China is at the start of another boom in car sales that is being propelled by rising incomes in third-tier cities and could continue for a few years, JP Morgan said on Wednesday.

A 21 percent surge in car sales this year has caught Chinese car makers, which had curbed production on expectations the country's sharp economic slowdown late last year would depress demand for big-ticket items, off guard.

Frank Gong, JP Morgan managing director and China economist, attributes the boom to a surge in the number of people in third-tier cities like Xian and Chengdu who now earn more than $5,000-$6,000, the minimum needed to buy and maintain a car.

"The strongest growth in car sales now is in third-tier cities and low-end cars," Gong told a press briefing in Hong Kong. "We believe this is the start of a third auto boom in China."


Blogger marshallhayek said...

You forgot to mention that China will match the CO2 emissions of USA this year and they need to deal with that. China will probably enforce a one car/person law such as the one child/family law. But my opinion is that other countries in the world should think about this problem as well.
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5:27 AM  

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