CHINA'S passenger car sales growth may climb to 20 percent in 2014 from an expected 10 percent this year due to government policy initiatives, rising purchasing power and continued urbanization, said a report released by BBVA Research yesterday.

China's auto market is not close to saturation despite a sharp 46 percent fall in sales growth in 2009 to 2.5 percent in 2011, the report said.

Though China's vehicle penetration rate grew five-folds between 2003 and 2011 to 56 cars per 1,000 people, it was still below the global average of 125 cars per 1,000 people in 2009.

BBVA predicted China's car ownership rate will more than double to 113 cars per 1,000 people in the next three years, based on the development experience of other emerging Asian economies like Taiwan and South Korea.

China's recent slowdown in auto sales growth was partly due tight credit conditions and removal of subsidies for auto purchases. But since China has recently eased its monetary policies and revived some subsidy programs, the sales may grow rapidly in the coming year.

In early June, China cut its interest rate for the first time in over three years. In May, it unveiled a 6 billion yuan (US$944 million) subsidy program to finance buying of vehicles with an engine capacity of 1.6 liters or less.

Source:shanghaidaily.com