Total imports jumped 113 percent to 61,100 units from January to April, more than 80 percent of which were sedans and sports utility vehicles, according to the Ministry of Finance.

Analysts said strong demand and a weak US dollar against the euro and Japanese yen drove up the prices of European and Japanese cars, which account for nearly 90 percent of imports.

Imported sedans generally sold at 10,000 yuan to 30,000 yuan higher than at the beginning of the year.

"Demand has continued to boom over the past few months in spite of price increases," said Bai Yingxin, an official with the Shanghai Waigaoqiao Automobile Exchange Market Co Ltd, the city's largest import car exchange. It sold a record 1,098 sedans last month.

"There is a large group of private business owners in China who believe the quality of import cars is better than domestic. Also, they believe certain brands of imports better represent their social status," said Yale Zhang, an Automotive Resources Asia analyst.

Import prices soared at the beginning of the year amid conflict between growing demand and a short supply of authorized imports.

Last month, the Ministry of Finance began distributing this year's auto import quotas to dealers, a move industry officials hoped would help reduce imported vehicle prices.

China's auto import quota was set at US$9.125 billion this year, including auto parts, compared with US$7,935 billion in 2002.

The government has decided to devote most of the quota to auto parts rather than completed cars to protect its fledgling auto industry without announc-ing a percentage. Last year, only 24 percent of the auto quota value was allotted to completed car imports.

China is committed to lifting restrictions on imports by 2005, with quotas increasing 15 percent annually by the end of 2004.

A smaller-than-expected rise in imports in 2002 resulted in a short supply. The situation will continue this year, analysts said.

China promised to cut car tariffs to 25 percent by 2006, but this year's figure re-mained at about 43 percent.

"The quota increase will leave limited room for the growth of imported cars. But it may help the market meet the soaring demand for auto parts,," said Shi Zhonghua, a China Securities analyst.

(Shanghai Daily May 30, 2003)