China market retained auto sales crown

Editor's note: It was another eventful year for China's auto industry as the market remained the largest in the world - but also faced a range of challenges.

Incentives expire

After two years of explosive growth, China's auto market cooled in 2011 as government tax rebates for small cars, trade-in subsidies and incentives for rural buyers expired.

Full-year vehicle production and sales numbers will be released today by the China Association of Automobile Manufacturers. Both figures are expected to range between 18 and 19 million, increases of just 2 to 3 percent compared with the remarkable growth of 2010.

Vehicle production and sales both hit 18 million units in 2010, a surge of 32 percent over 2009.

In the capital city Beijing, where restrictions on new car license plates took effect at the first of the year, new car sales plummeted to less than half of the 800,000 sold in 2010.

Premium boom

China's luxury car sales continued strong growth in 2011 despite increasing external market pressures.

Segment leader Audi sold more than 310,000 vehicles in China last year, breaking the 300,000 benchmark for the first time. The number for the first time outstripped the company's sales in its home market.

The carmaker plans to more than double its yearly output in China to 700,000 units after 2015.

German premium brands BMW and Mercedes-Benz also performed well last year. Both are building capacity for long-term development and adding new products to their local lineups.

In December they began small-volume export of long-wheelbase cars originally tailored for Chinese consumers and only built at their joint ventures in China. It was the first time China-made luxury vehicles were shipped abroad.