China's car sales expand steadily

China's passenger car market grew steadily in 2012 as its December performance powered to the highest level last year despite demand disruption caused by a boycott of Japanese cars triggered by Japan's illegal purchase of the Diaoyu Islands.

Deliveries of sedans, sport-utility vehicles, multi-purpose vehicles and minivans rose 8.6 percent from a year earlier to 1.56 million units last month. That brought the full-year figure to 14.68 million units, up 6.8 percent compared with a 2.8 percent increase in 2011, the China Passenger Car Association said yesterday.

Rao Da, the association's secretary-general, described December's performance as "unexpected" even considering that the month is China's traditional peak season for buying cars.

He expects China's car market to grow around 10 percent this year if market forces are allowed full play. But facing increasing traffic pressure, the government is likely to intervene and keep the growth rate at 5 percent.

Even growing 5.5 percent annually, China's car ownership level will surpass 270 million units in 2020, triple that of 2010.

One of the concerns faced by the domestic car market last year was the inventory backlog. But annual production outpaced sales only slightly, growing 6.9 percent to 15.41 million units and car dealerships have had their inventory pressure eased during the past three months, Rao said.

Japanese carmakers' China sales which were hit during the Diaoyu Islands dispute between the two nations continued to recover last month while domestic players further raised their market share, Rao said.