China's vehicle sales increased 25.5 percent in October compared to the same month last year, pushing the 10-month tally beyond the full-year figure for 2009.

According to the China Association of Automobile Manufacturers (CAAM), 1.2 million passenger cars and 340,000 commercial vehicles were sold last month.

Nearly 70 percent of the passenger vehicles purchased in October had engines with a displacement of 1.6 liters or smaller, a result of government subsidies and tax breaks for energy-efficient vehicles, said CAAM spokesperson Zhu Yiping.

According to the association, total vehicle sales in the first 10 months jumped 34.8 percent to 14.7 million, surpassing the 13.6 million domestic deliveries last year.

Passenger car sales between January and October totaled 11.1 million vehicles, surpassing the 2009 figure of 10.3 million.

SAIC Group was again sales champion among domestic carmakers with nearly 3 million vehicles purchased in the 10 months to October.

Following it were Dongfeng Motor Corp, FAW Group and Chang'an Automobile Group, which reported sales of 2.21 million, 2.07 million and 1.92 million respectively.

Also among the top 10 were BAIC Group, Guangzhou Automobile Group Co, Chery Automobile Co, BYD Co, Brilliance Auto and Jianghuai Automobile Co.

CAAM previously lifted its expectations for 2010 full-year vehicle sales to 17 million following explosive growth in September.

Analysts are generally convinced that China's auto market will continue to grow rapidly in the next five to 10 years due to accelerating urbanization and increasing individual wealth.

Yet they warn competition is expected to become much fiercer, especially for homegrown brands.

According to CAAM, domestic brand cars now only account about 30 percent of the sedan segment where foreign brands prevail.

Even the low-cost car segment traditionally dominated by homegrown brands is now a target of foreign companies as they begin to produce models priced around 60,000 yuan - like the Chevrolet Sail and Nissan March - at their local joint ventures.

Yet a drag on the overall optimistic outlook is concerns about pressure on infrastructure and the environment from increasing numbers of vehicles on the road.

According to Dong Yang, secretary-general of CAAM, more vehicles won't necessarily result in these problems.

Auto manufacturers should continue efforts to reduce energy consumption and carbon emissions, he said, adding that the environment in many cities has actually improved despite increasing numbers of automobiles.

He said the auto industry should not be blamed for congestion in big cities because the right approach is to develop public transport and improve city planning.

(China Daily November 15, 2010)