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The increase in both production and sales come on the heels of the government stimulus plan. Experts predict the country will likely sell 2 million more vehicles compared to the previous year. Analysts estimate that government policies drove more than half of the 2 million cars purchases.
Chen Bin, Director of Department of Industry of NDRC said "Continuous economic growth has generated great demand in the auto industry. The government reduced the purchase tax for small emission cars, and so the sales of vehicles below 1.6 liters increased a lot."
Officials say that sales of small emission cars accounted for 70 percent of overall sales, hitting more than 4.3 million units from January to August. Aside from tax reductions, the government's subsidy policy in rural areas has also developed a great potential market.
Shen Jinjun, Standing Deputy Director of China Automobile Dealers Association said "The increase in rural areas has made a great contribution to the whole market. The sales of small passenger cars in rural areas increased by more than 150 percent in August and by more than 60 percent from January to August year on year."
Experts predict that the country's stimulus plan will help generate more than 125 billion yuan for the auto industry this year.
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