China car sales expected to stay in overdrive

It overtook the US last year with sales surging 45 per cent to 13.6 million vehicles.

Monthly figures this year have seen double-digit percentage growth and analysts are forecasting sales may climb roughly 30 per cent to about 17 million vehicles for the full year.

Such explosive growth may not continue in 2011 because a tax cut on new vehicle purchases is expected to end. But a rebate on cars with small engines will stay in place, as the government seeks to encourage people to drive more fuel efficient vehicles.

The forecasts came as the country's second major auto show this year opened yesterday in the southern city of Guangzhou.

"We think the fundamentals of growth in China are very strong," said Kevin Wale, president and managing director for GM China, citing an economy that is expected to expand eight per cent or more annually.

"To be honest, the Chinese have developed a love affair with the car."

By the time 2010 is over, he said, GM will have sold about 2.3 million cars in China, while next year sales will climb about 10 per cent to more than 2.5 million.