SHANGHAI -- Sales of passenger cars in China in the first six months of 2003 surged 82.4 percent over a strong year-ago period to 842,800 units, according to the official People's Daily newspaper. Production rose 103 percent to 895,500 units.
"There is no sign the passenger market is slowing down," says Yale Zhang, a Beijing analyst with Automotive Resources Asia, an auto industry consulting firm.
ARA includes SUVs and minivans in its tally to come up with the wider measure of passenger-vehicle sales.
It estimates first-half sales at 909,431 units, up 85 percent from a year ago.
Car sales last year grew by a scorching 56 percent to 1.2 million units, according to official numbers.
It was assumed that growth would cool somewhat from those rates, but a rash of new models in new market segments seems to be luring new buyers into the showroom.
But supply may be beginning to overtake demand.
Lawrence Ang, auto analyst for Deutsche Bank Securities in Hong Kong, points out that first-half car sales represented 94 percent of production, compared with 106 percent a year earlier.
"This means there will be price cuts to sell down inventory," he says.
The last serious price war in the Chinese auto market occurred in early 2002. At that time, sales plummeted as buyers waited for prices to drop even more.