SHANGHAI - It's lunchtime on a late winter day in China's financial hub and a steady stream of Shanghai's upwardly mobile drift through a car dealership at a busy intersection on East Nanjing Road.
Xue Shixiong, a casually dressed 23-year-old who looks disarmingly young for a car saleswoman, says 90 percent of her customers are buying a car for the first time.
"People who are around 30 years old are the main buyers," she says, standing between a Volkswagen Polo and a General Motors Buick Sail, both shiny red and locally made at Sino-foreign joint venture plants.
Such buyers make China the fastest-growing major car market and are attracting billions of dollars in investment from the likes of Ford Motor Co. and General Motors, Honda Motor Co., BMW and Volkswagen.
Car sales in China, which rivals South Korea as Asia's second-largest automobile market, grew 56 percent last year to crack the one million mark.
In January, China-based manufacturers produced 126,800 cars, a 120 percent leap from the previous year. By contrast, sales in western Europe shrank 7 percent from the previous January as economic worries crimped demand.
China's car craze is only getting started. With its minuscule rate of car ownership, Deutsche Bank predicts Chinese auto sales could rise by 20 percent to 30 percent a year over the next 10 years.
Many shoppers here say they are several years away from buying.
Prices are coming down as competition mounts and import tariffs ease, but cars are still beyond the reach of the vast majority of Chinese despite rising incomes in eastern cities such as Shanghai, Beijing and Guangzhou.
In Shanghai -- China's richest city -- the average disposable income last year was just 13,250 yuan (US$1,600) per person, according to government figures.
"The big issue is the price," says Adam Yu, an information technology professional in his 40s. Yu was admiring a black Dongfeng "Safe" SUV with beige and blue trim that he says seems a bargain at 115,800 yuan.
The dealership on East Nanjing Road carries roughly a dozen different makes, both foreign and domestic, with prices ranging from a 59,800 yuan (US$7,222) Kia Pride to a 278,000 yuan Honda Odyssey minivan made in southern China.
On top of the purchase price, a buyer in congested Shanghai must usually pay as much as 30,000 yuan for a local license plate.
With a well-developed public transport system in Shanghai, some shoppers say they want to buy a car less for everyday use than to use for family holidays.
Xue, the saleswoman, says Shanghai-made cars such as the small and sporty Polo are especially popular with local buyers, nearly all of whom are men. Haggling over price is routine, she says, adding that she sells four or five cars per month.
"People prefer cars made in Shanghai because the price is relatively low and after-sales service is very good," she says.
Another salesman concurs, noting a model made in the northeastern city of Harbin is a tough sell in Shanghai.
Most buyers in China pay for their new cars in cash, although consumer finance is on the rise in China and is expected to help maintain the torrid growth of China's auto sector.
According to state media, bankers said about 20 percent of car buyers sought loans in 2002, compared with around 70 percent in advanced western countries, although the percentage of Chinese buyers who actually get such loans is lower as banks worry about high default rates.
As customers stroll among the 30-plus vehicles in the showroom, Chinese pop music plays from a car stereo display. Otherwise, there is little of the flash that typifies showrooms in the west.
A young man from the nearby city of Suzhou and his wife admire a luxurious Volkswagen Passat during their lunch break.