China's Auto Imports Soar In 2002.

China imported more than 127,000 vehicles in 2002, up a huge 77 percent from the year before as lower import taxes following its World Trade Organization (WTO) membership cut the cost of foreign cars in the world's fastest growing auto market. The official Xinhua News Agency quoted customs figures as showing China imported 127,394 vehicles last year, with their combined value surging 81.6 percent year on year to $3.17 billion.

"There was a steep rise in the average value of imported sedans, indicating that locally made medium- and low-end sedans are more competitive so imports of high-end cars rose," Xinhua said. Sales of imported vehicles was still small compared with domestically made vehicles, which hit 646.5 billion yuan ($78.1 billion) in 2002, up 30.8 percent from 2001, according to official. Xinhua said the number of imported sedans rose 50 percent to 70,329 and they were worth a combined $1.61 billion, up 70.3 percent from the year before. It did not name any brands.

The surge in imports was attributed to a cut in duties last year. Auto tariffs fell to between 43.8 and 50.7 percent from 70 to 80 percent in line with China's commitments for World Trade Organization membership in December 2001. China has pledged to lower import duties on automobiles to 25 percent by July 1, 2006. It will also raise import quotas by 15 percent annually with all limits to be abolished by 2005.

The Chinese car market has ballooned in recent years alongside rising incomes and a flurry of foreign investments. General Motors Corp., Volkswagen AG and a slew of top Japanese carmakers are looking at the rapidly growing Chinese market, the product of years of robust economic expansion.

Ford Motor Co., said it expected to sell 20,000 of its newly launched Fiesta small cars in China this year, rising to 50,000 in 2004. Domestic automakers, including the foreign joint ventures, sold 3.248 million vehicles last year, up 37.1 percent from 2001. That figure included 1.126 million passenger cars, up 56 percent.

China said it will tighten regulations on the construction of vehicle manufacturing projects amid concerns about overproduction. State Economic and Trade Commission official Zhu Hongren. Zhu, who heads an SETC department responsible for coordinating industry, warned of a "price war" as domestic car production is expanded and new vehicle models are launched.

Observers have noted the rush of vehicle makers into China in recent years, attracted by the country's massive market growth prospects. However, Beijing is thought to be concerned that the Chinese industry is developing in a fragmented way - encouraged by ambitious regional authorities.