China's auto market will maintain stable growth, but its speed will slow down gradually, said overseas economists attending a roundtable meeting on the industry in Shanghai.

The meeting, sponsored by the Economist Group, was held March 14-15.

"Currently, China's auto industry has entered a stage with more challenges. Sales have been slowing down and prices have dropped," said Graeme Maxton, Chairman of the meeting.

Maxton said that from now on, car producers, parts producers and regulators should readjust themselves to the new environment.

Julian Steer, chief auto analyst of the Economist Group, predicted that China's auto sales in 2005 will grow by eight percent. In 2006, the growth will be 20 percent.

But Steer also said that by 2007, the production capacity of the industry will exceed sales by a large margin. He predicted that in the year, the country will produce 9 million vehicles a year, while sales standing at 4 million, "unless exports surge at that time," he said.

A report by the consulting company Ernst & Young, however, said overproduction is "not as high as people think."

Mike Hanley, chief officer of the auto industry in the company, said that Chinese government will take measures to control the development of the industry and curb the flow of loans, which will make weak automakers quit.

Ernst & Young's report predicts that China's auto exports will emerge as noticeable force on world market in 2007.

(Xinhua News Agency March 17, 2005)