China’s automotive sector grows rapidly
The automotive sector in China shows an upward trend since the country joined the World Trade Organization (WTO) in 2001. Analysts believe that the country's accession to the WTO will further improve the investment environment and open up the market to the outside world. In addition, Chinese automakers are cutting their prices to attract customers and these price cuts in China's fast growing auto market appear to be endless. China's biggest compact car maker FAW Xiali is expected to decrease its prices by 10%. It is also reported that compact car makers have to cut their prices to boost sales and cope with red hot competition. Moreover, under its WTO obligations, China has cut its tariffs on vehicle imports to 34.2-37.6% this year from 38.2-43% last year. The vehicle import quota also increased by 15% to $10.5 billion. Chinese government efforts to remove vehicle import quotas and lower import duties to 30% at the end of 2005. The country also considers to reduce its import tariffs to 25% by the middle of 2006. China's total vehicle output surged by 36.6% to 4.44 million units last year, including 2.01 million passenger cars. Total vehicle output is expected to reach 5.7 million units this year, including 2.7 million passenger cars. By 2010, China will become the third largest automaker in the world after US and Japan.