Despite the slowdown in 2008 sales, the Chinese auto market remains a beacon of hope to foreign carmakers battered by rapidly shrinking demand in the US and other major markets.

"The Chinese vehicle market will keep growing, though at a slower rate than before, and global automakers have to step up efforts in China to boost sales," said Yale Zhang, director of Greater China Vehicle Forecasts for US consultancy CSM Worldwide Corp. "Where else can they go?" he asked.

Customers take a close look at a car in an automobile showroom in Huaibei, Anhui province. [Asia news]

He estimated that China auto sales in 2008 grew 7 percent from a year before and, with a bit of help from the government stimulus package, a further increase of 6 percent in 2009 can be expected.

"China's auto industry is likely to begin to pick up from the second half of this year and continue the steady progress in the future," said Zhang.

GF Securities also predicted in its recent industry report that the market descent will hit bottom in the second quarter in China, after which demand for vehicles will revive.

Xu Changming, an auto analyst with the State Information Center, agreed that although the domestic auto market will experience a more difficult time in the first quarter than last year, automakers should be optimistic for the second quarter.

These encouraging words are obviously heeded by the automakers.

A spokesman for Ford Motor Co, the second-largest US auto company, said financial woes will not affect the group's expansion strategy in China.

"We will continue to introduce new products and invest more in China with profits from our local operations," said spokesman Kenneth Hsu.

Ford will produce its all-new Fiesta subcompact at its joint venture in Nanjing from the first quarter.

Other major foreign auto firms have also remained committed to their China expansion plans.

"The slowdown is temporary. For a long-term consideration, it's time to invest in the market to stimulate sales for a robust future development," said Bjoern Hauber, general manager of sales and marketing with Mercedes-Benz China Ltd.

Showing their confidence and recognition to the hopeful Chinese auto market, GM and its joint ventures completed several important projects recently, including the expansion of SAIC-GM-Wuling's plant in Qingdao and the second phase of its Liuzhou West Plant.

In addition, Shanghai GM, the US giant's joint venture with China's largest automaker SAIC, invested 2.67 billion yuan to open its second vehicle manufacturing plant in Shenyang late last month, producing the new Chevrolet Cruze.

And Peter Schwarzenbauer, member of the board of Audi AG, said: "The financial crisis and slowdown of China's auto industry won't make us reduce production or sales in China. Instead, we are considering extending our product portfolio."

The German luxury brand is planning to establish a China branch in Beijing to reinforce local sourcing, and research and development.

(China Daily January 7, 2009)