An annual growth rate of 7 percent would be suitable for China's auto industry in the coming years, said Chen Yilong, secretary general of China Association of Automobile Manufacturers.

Chen was cited by the China Securities Journal on Friday as saying that China's surging economy will sharply increase the number of high-income families capable of buying automobiles. As a result, the auto market enjoys a good base of consumers.

In the meantime, the reduced price level of autos and improved credit services for auto consumption have worked together to turn households with purchasing power into actual buyers, Chen said.

He predicted that in 2005, 38 million families will be financially capable of buying autos, and the demand of sedan cars will be around 2.2 million units. By 2020, the demand for cars is expected to reach eight to nine million units.

Chen said that an annual growth rate of 7 percent will be appropriate for China's auto industry, arguing that a lower rate would undermine the dynamics of the auto industry while a higher rate would bring along extra pressures from energy resources and environmental protection.

Chen said the anticipated auto output will be 5.07 million for this year, 7.25 million for 2010, and 11.87 million for 2020.

Increased exports of auto products is a must for maintaining the smooth development of the industry. Raising auto exports to over 20 percent of total output within 10 years would be ideal, requires more efforts in the development of self-owned brands and improved product reliability. he said.

Source: Xinhua