China Association of Automobile Manufacturers said on recently that between January and June 2008, the country sold 3.61 million passenger motor vehicles, a growth of 17.07 percent over the same period a year previous. The growth rate, however, was 5.19 percentage points lower than the 22.26 percent level recorded in the same period last year.

The total included 2.67 million cars, up 16.72 percent and 111,400 multiple purpose vehicles (MPVs), an increase of 4.09 percent. In addition, 224,300 sport utility vehicles (SUVs) were sold, up 42 percent.

The top-10 brands accounted for 1.76 million units, or 65.86 percent, of the total car sales. They were FAW Volkswagen, Shanghai Volkswagen, Shanghai GM, FAW Toyota, Chery, Dongfeng Nissan, Beijing Hyundai, Guangzhou Honda, Geely and Chang’an Ford.

In June, 588,300 passenger vehicles were sold nationwide, up 15.23 percent over the same month last year.

The total included 433,600 cars, up 13.19 percent, 18,100 MPVs, up 4.53 percent, and 45,200 SUVs, up 49.25 percent.

Analysts with the association attributed the fast growth of SUV sales partly to mounting demand driven by disaster relief.

Experts with the Zhonglian Auto Trade Market in Beijing said most potential auto buyers had taken a wait-and-see attitude and that the market would warm again in late September upon easing of the Olympic auto restrictions.

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Domestic car makers sold a combined 1.85 million passenger cars, including sedans, multi-purpose vehicles, sport utility vehicles and crossovers during January to March, compared with 1.53 million units for the same period of last year, the official auto association said.

The figures are impressive as the country was hit by severe snowstorms in January that halted production and delayed deliveries.

Sales for March amounted to a record of 700,500 units, up 23.55 percent from the same period of last year, fueled by heated market demand after the transportation recovery.

Meanwhile, in a separate report, first-quarter production expanded 16.4 percent to 1.82 million units, the China Passenger Car Association said.

“Many consumers placed their orders as they were afraid car prices would go up amid the surging cost of raw material such as steel and iron ore,” said Rao Da, secretary general of CPCA.

“The sizzling sales demonstrated the development of China’s auto industry is still on a fast track because it is not boosted by widespread price discounts.”

China had 163 million motor vehicles by the end of March, up 1.85 percent from the end of 2007, according to the Chinese Ministry of Public Security.

Meanwhile, the number of drivers was also on the rise, reaching167 million by the end of March, up 2 percent from the end of 2007. Of the total, 66.03 percent were automobile drivers, the bureau said.

FAW-Volkswagen, the venture between Volkswagen and First Automotive Works Group, notched up the highest sales of 144,800 units for the first three months, trailed by Shanghai Volkswagen’s 137,400 units and Shanghai GM’s 116,200 vehicles.

Top 10 best sellers, which also include Chery, FAW Toyota, Dongfeng Nissan, Geely, Guangzhou Honda, Chang’an Ford Mazda and Beijing Hyundai, sold a combined 905,500 vehicles, representing 66 percent of the total.

Guangzhou Honda said sales of its latest Accord set a record of 21,068 units in March, beating Toyota’s Camry to regain the sales crown in China’s mid-to-high-class segment three months after its launch.

The three best-selling models were Volkswagen’s Santana sedan, Jetta mid-class sedan and General Motors’ Excelle.

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The executive vice president of the China Automobile Industry Association (CAAM), Dong Yang, pointed out that the structure of China’s residential consumption is shifting from mainly food and clothing to living and transportation. Many families still do not own a car. There is a demand for cars from Chinese consumers. In the future, China’s auto market will continue to maintain rapid development.

“They will continue to expand at double-digit rates in 2008,” he added.

In 2006, China overtook Japan to become the world’s second largest car market, trailing only the United States, with sales of7.2 million units, up 25.13 percent from a year earlier. The country was also the world’s third largest vehicle producer, after Japan and the United States.

Currently, vehicle ownership in China was 44 for every 1,000 people. This was compared with the world average of 120. The United States had 750 vehicles for every 1,000 people.

Dong said the domestic car market had huge potential as the country had 57 million motor vehicles by the end of last year. Among them were 21.5 million privately-owned cars, according to latest government figures.

“Motor vehicles will play an extraordinarily-important role in China’s consumer spending,” he said, as the economy maintained fast growth and the government tried to encourage people to spend money.

Total auto sales in China jumped to 7.95 million units in the first 11 months of 2007, up 23.2 percent from a year ago, according to CAAM data.

Vehicle sales in November alone rose 16.3 percent in comparison to the same period a year earlier to 800,900 units.

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National Geographic Channel from Youtube, via Shanghaiist

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China may produce more than 8.6 million vehicles this year as it narrows the gap with Japan and the United States, the world’s top two auto makers, according to the National Bureau of Statistics.

In 2003, China turned out 4.44 million vehicles and sold out 4.37 million, an increase of 36.6 percent and 34.5 percent respectively over the previous year. Among them, there were 2.01 million cars with 1.97 million. of them sold, up 84.4 percent and 80.7 percent respectively. China then outran France to become the world’s fourth large auto manufacturer.

China’s economic growth, averaging about 10 percent over the past five years, is raising demand for automobiles and has boosted production from about 100,000 vehicles a year in the 1980s to 7.28 million last year, making the country the world’s third-biggest vehicle producer.

“The industry is facing a grave overproduction situation,” the official Xinhua News Agency quoted Chen Bin, deputy director of the commission’s industrial department, as saying. China’s annual vehicle output capacity was already at eight million complete units, with a further 2.2 million units of annual capacity under construction and soon due to be completed. Without government action to curb investment, China’s auto factories could be turning out up to 20 million vehicles a year by 2010, Chen said.

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As the number of millionaires continues to grow in China, the country attracks more and more events targeted for the rich and famous: the annual Top Marques luxury fair returned to the Shanghai International Convention Center in Pudong yesterday with nearly 300 rare exhibits including roadsters, yachts, works of art and antiques.

The four-day event is expected to attract more than 30,000 visitors, mostly customers invited by the exhibitors and senior staff from wealthy companies in banking, energy resources and IT, according to Sheng Lei, the general manager of the event organizer, Borrison Expo.

Sheng said visitors are expected to spend 500 million yuan (US$66.7 million) on the luxury items. The expensive products include a villa in Sanya, Hainan Province, costing more than 100 million yuan, a Spyker car worth more than 400 million yuan and a 250-million-yuan Schimmel piano.

Fancy cars have always been the highlight of the Top Marques. This year, it has brought to China an Aston Martin D89 - the car driven by Daniel Crag in Casino Royale, the latest 007 incarnation. Priced at 380 million yuan, the roadster is waiting for its first owner in China. Other leading car makers such as Porsche, Ferrari and Cadillac have also brought their 2008 models.

While Top Marques luxury fair in Shanghai still hits the headlines with record transactions, the northeast is catching up with being posh as well. Luxury consumption is no longer a characteristic found during the golden week. In major cities such as Shenyang, Harbin and Changchun, many top global brands have penetrated these markets with exclusive counters and stable audience.

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With the opening to new markets and the growth of the Chinese economy, a new social class has emerged — to some extend, unthinkable in a Communist China: the millionaires. According to a survey from Cap Gemini/Merrill Lynch, the number of millionaires (in US Dollars) in China have reached more than 230,000. The large majority of these new riches choose Shanghai to invest their money and also spend their money. And these new riches can by quite demanding consumers: Yang Qingshan — secretary-general of the Chinese Strategy and Branding Association — says that more and more Chinese people invest in luxury items, such as cars, watches, designer clothes, accessories and cosmetics.

Seeking to target such people, new businesses that will recently were unthinkable in the “Empire of the Center”: the Millionaire’s Fair — event organized by the Millionaire Magazine, held for the first time in 2001 em Amsterdam — since then showcased products in countries such as France, Belgium and Holland, was hosted for the first time in an Asian country this year, in Shanghai.

Despite of the poor infrastructure, the e-commerce is also flourishing in China, fueled by so many wealthy clients: the number of online business in China surpasses 20 million.

Several luxury brands from all over the world have been attracted by these consumers: Dior, after opening several stores in china which sells over 11 million Yuan an year — something around 1.3 million dollars–, recently opened a Dior Center in Shanghai, the third in the world after Paris and Tokyo, hoping to reach 15 million Yuan in annual revenues.

The luxury automobile industry was to first to acknowledge such market potential, and for years have been harvesting fruits of their investment in Asia: 3 of 4 most expensive units manufactured by Bentley last year, each one costing more than 8 million Yuan — something around 1 million dollars, were bought by Chinese millionaires; 15% of all the limousines manufactured by Rolls-Royce had Asia has their buyers.

Despite of such explosion of consumption, the ordinary joe in China still keeps his money under the mattress: the Chinese National Savings is over 9 trillion Yuan– a little over 1 trillion dollars, representing 45% of the Chinese Gross National Product (GNP). As a comparison, Brazilian National Savings — also an emerging economy, goes around 25% of the Brazilian GNP. The rate of consumption over the Chinese GNP doesn’t go over 50%, much lower the the overall world average of 80%.

Nevertheless, the Chinese Central Government doesn’t want their comrades to stray away and recently created a system to overtax luxury items, trying to discourage spending and promote socialist values.

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