China Overtakes U.S. as the World's Biggest Auto Market

Hello and welcome to this edition of CRI Roundup brought to you by China Radio International. I am Kelda Yuen in Beijing.

In this week's program, we will focus on the development of China's Auto industry.

We'll be right back so stay with us.

The Chinese automaker BYD has presented an all-electric crossover vehicle at the North American International Auto Show in Detroit.

BYD is making aggressive moves using hybrid technology.

Fred Ni, a general manager with BYD, says the China-built crossover, dubbed the e6, will be very affordable.

"BYD's e6 is a full-size electric vehicle with roomy space for five passengers. Our BYD ferrous battery are located under the seats and therefore will not sacrifice any cabin or cargo space."

BYD sold 450-thousand vehicles in China last year and wants to increase its sales to 800-thousand this year in its home market.

Aaron Bragman, an auto analyst at IHS Global Insight in Troy, Michigan, says BYD will have a difficult time selling cars in the U.S. because its designs look older than Americans are accustomed to, and the quality of the body panel assembly and paint do not measure up to American standards.

"If you have aspirations to be the largest carmaker in China, the largest carmaker in the world by 2025, you have to have the right products. It has to be flawless; it has to be fully competitive. BYD vehicles are not yet there."

But Bragman says it won't be long before BYD and other Chinese automakers raise their games and become competitive in the U.S.

In fact, China's auto industry has seen a rapid growth in recent years.

In 2009, Chinese auto sales and output both exceeded 13 million, overtaking the U.S. to become the world's biggest auto market.

Though the global financial crisis struck a blow to China's auto industry at the end of 2008, the Chinese government implemented a series of policies to boost its development.

Jia Xinguang is a well-known analyst in the auto industry.

"China's fiscal revenue grew as much as 8 percent in 2009. It serves as a driving force for the development of the auto market. Moreover, the central government has carried out favorable policies such as reducing vehicle purchase taxes, subsidizing car purchasing for rural areas and trading in old cars for news ones. This has boosted auto consumption."

In addition to the growth in auto sales and output, the Chinese auto industry also has also put a great deal of effort in developing cars with new energy and innovative technologies.

Dr. Zhao Fuquan is vice chairman of Geely Automobile Holdings Limited.

"We have set out to develop the third generation of electric cars, which combine the use of solar energy and electricity. They will be on display at the 2010 Beijing Auto Show."

Experts say with the per capita GDP surpassing 3,000 U.S. dollars in China, the auto market can expect a golden period of development in the future.

Yuan Yue is president of Horizon Research and Consultancy Corp, a renowned professional research and consultancy firm in China.

"Common Chinese households have begun purchasing cars. The process will last 50 to 60 years. It is at a different stage from the industrialized countries."

Lin Lei is president of Sinotrust, a leading supplier of marketing solutions and credit solutions in China. He says that with strong consumer demand and continuing favorable policies, market sales can increase by 15 percent this year.

"In 2010, we expect the auto market can maintain its momentum of development. Though it might be difficult to reach a 40 percent increase as in 2009, we think it can grow by 15 percent. That means auto sales and output will hit 15 million."

The Chinese government will continue to carry out its policies such as reducing vehicle purchase tax and car subsidy program for rural areas to boost auto consumption.

And with that, we conclude this edition of CRI Roundup. If you have any comments or suggestions, or would like to listen to any of our programs, you can visit our website at Crienglish.com.

I'm Kelda Yuen in Beijing. Thank you for listening, and stay tuned for more on China Radio International.