As one of the leading industries in China, the country's automotive industry has been somewhat affected by the current financial turmoil.

What are the selling conditions for Chinese car manufacturers at present? What of the feedback of the automotive consumers? And what will the government do to resolve any potential problems? CRI Reporter Chen Xi brings you the details.

Reporter:

China is widely believed to be amongst the largest emerging vehicle consumption markets on the globe. However, that lucrative environment is beginning to change in light of the global crisis, which has dramatically influenced most major economies worldwide.

At a large vehicle fair in Beijing, it is not hard to find idle sales staff amongst seemingly attractive discounts for many unsold luxury cars. Few consumers show up and make genuine enquiries.

Salesmen gave me their take on the current market conditions.

"Most clients just take a look and ask for prices, very few intend to buy cars."

"I think vehicle prices will drop continuously. Most manufacturers did not hit their sales targets this year."

Consumers show little inclination, saying they would rather wait for a clearer market trend.

"The prices drop drastically. The car I want to buy was 160 thousand Yuan last year, and now it is only about 140 thousand Yuan."

"I want to buy a car, but not now."

A massive stimulus package worth some 570 billion US dollars was released recently by the Chinese government, aimed at boosting the domestic demand.

Analysts say that the move is particularly conducive to revitalizing confidence in the auto industry. At the same time, the Chinese government is taking measures to help domestic automotive producers, by lowering taxes on new cars and increasing grants for research into hybrid cars and new technology innovation.

In addition, state-owned Chinese banks are being actively encouraged to lend more money to Chinese auto manufacturers as bank regulators have eased restrictions on loans to heavy industry.

Further preferential policies have been implemented at grass-root levels. For example, in China's northwest Shaanxi Province, some 26 billion Yuan or nearly 4 billion US dollars has been invested in a plan to help local industries generate returns during the ongoing financial crisis.

Here is Yuan Chunqing, governor of Shaanxi Province.

"At present, there are two major vehicle producers in the province. But they are showing contrary conditions at present. The local government in Shaanxi will invest this huge capital to help those enterprises in difficulty, including the domestic vehicle industry."

Official figures say that China's automotive industry has reported a net income increase of over 7 percent year on year to nearly 3 million U.S. dollars for the third quarter of this year.

Industry insiders say they hope the trend will remain the same for the fourth quarter of this year, with higher raw materials costs and lower prices.

Chen XI, CRI News