Output stood at 1.0197 million units for the period, representing an increase of 54.7 percent on a year earlier, said China Association of Automobile Manufacturers at the weekend.

Passenger cars have become the largest contributor to total vehicle output growth, the association said.

Output of domestically made passenger cars rose by 127.28 percent year-on-year to 398,000 units during the first three months this year, according to the association.

"The robust output growth mainly results from strong domestic demand based on the nation's dynamic economy," said Zhu Yiping, spokeswoman of the association.

Total vehicle sales during the first quarter amounted to 974,800 units - up 51.71 percent on the same period last year.

Sales of domestically made passenger cars doubled to 383,400 units during the first three months from a year earlier.

"The rise in sales was also boosted by price cuts and new product launches which provide local consumers with more choice," Zhu said.

New models to be launched during the first half of this year include the Accord of Guangzhou Honda, the Regal of Shanghai General Motors and the Vios of Tianjin Toyota.

Many companies, such as Guangzhou Honda and Dongfeng Peugeot Citroen, have cut prices this year in a struggle for market share.

"The cheery situation during the first quarter has laid a sound foundation for an overall growth in vehicle output and sales this year," Zhu said.

She predicted vehicle output and sales will reach 1.15 million units during the second quarter.

Both passenger car output and sales are expected to increase to 380,000 units during the period.

Xu Changming, an analyst from the State Information Centre, said total sales of vehicles made in China will exceed 4 million units this year.

"Carmakers should accelerate the upgrade of their existing products as new models are playing a bigger role in the market," Xu said.

Foreign auto giants will introduce more new models to their joint ventures in China during the rest of this year.

Qie Xiaogang, an official from the Beijing Asian Games Village Auto Exchange, said the passenger car market in China this year will maintain the same growth of last year.

Last year, sales of passenger cars made in China grew by 56 percent year-on-year to 1.15 million units.

"The price of cars on the domestic market will fall by an average of 8 to 10 percent by the end of this year," Qie said.

(China Daily April 14, 2003)