China's monthly vehicle sales surpassed those in the US for the first time in January, moving China closer to becoming the world's biggest auto market.
With its growing middle class and vast potential as a consumer market, China is vital for General Motors, Volkswagen and Toyota as they count on demand in China to offset weakness elsewhere.
But China's ascent in the global auto market has been hastened by the plunge in US. auto sales, which tumbled 37 percent in January to a 26-year low of 656,976 units.
Chinese vehicle sales also have cooled, but hardly as dramatically. In January, 735,000 vehicles were sold, down 14.4 percent from a monthly record 860,000 last January.
China's vehicle market has grown dramatically in recent years, overtaking Japan in 2006 to become the world's second-largest by annual sales. With 1.3 billion people, China will inevitably leapfrog the US, with a population of 300 million, into the No. 1 spot, industry experts say.
Still, if American car demand revives in coming months, the US will remain the world's largest market by annual sales - at least for another year.
China's best-selling automakers are GM and Volkswagen but its own producers, such as Chery, are growing fast.
General Motors says it sold a record 1.09 million vehicles in China, up 6 percent from 2008.
January sales in China were 0.8 percent below those in December and well below the 790,000 some analysts had anticipated. To spur the slowing auto market in China, the government has rolled out measures to help boost sales as part of a multibillion-dollar economic stimulus package while it also tries to promote cleaner, more energy-efficient engines.
The sales tax on cars with engines less than 1.6 liters has been cut by half to 5 percent through the end of the year. The government also is spending about $730 million on subsidies to farmers to replace three-wheeled vehicles or outdated trucks with small, 1.3-liter or less vehicles.
Another $1.5 billion is going into upgrading automakers' technology and developing alternative energy vehicles.
Trucks and buses make up a larger share of China's sales than those of the US or Japan. Some observers say that makes direct comparisons misleading. But many rural Chinese use such commercial vehicles for everyday family use. (info from The Associated Press)