China overtakes US as largest auto market: state media

Agence France-Presse

Posted at Feb 10 2009 01:37 PM | Updated as of Feb 10 2009 09:37 PM

SHANGHAI - China overtook the United States as the largest auto market in the world in January, according to data published by Chinese state media on Tuesday.

A total of 735,000 automobiles were sold in China last month, state television said, citing Dong Yang, deputy director of the China Association of Automobile Manufacturers.

By contrast, 656,976 vehicles were sold in the United States, according to preliminary estimates issued last week by market research firm Autodata.

However, analysts said January was an unusual month because the Lunar New Year boosts sales in China as the United States sees a post-Christmas drop, and for the full year the US was expected to remain the world's largest market.

"China had a strong month and the US probably had its worst month in a long time," Michael Dunne, a Shanghai-based analyst with research firm JD Power said.

"We're still holding to our forecast that China won't surpass the US this year," Dunne told AFP.

The sales figures are more a sign of the collapse of US car sales than a surge in Chinese demand, John Zeng a Shanghai-based analyst with Global Insight said.

"More than 80 to 90 percent of US car purchases were made on credit," Zeng said. "Once the financial system got into trouble, the sales model supported by the financial system collapsed."