March purchases accelerate driven by demand for entry-level models

China's passenger vehicle sales returned to high-speed growth in March due to surging demand for entry-level cars, as well as the flurry of new models launched in the spring, the China Passenger Car Association said on Tuesday.

The total sales of passenger cars, sport-utility vehicles, multi-purpose vehicles and minivans jumped 15 percent year-on-year to 1,459,095 units in March, the third-highest monthly growth in a year, the association said.

The strong performance in March boosted first-quarter domestic passenger vehicle sales to 4.21 million units, up 19.2 percent year-on-year.

"Usually, automakers prefer to debut new or updated models in March and April. That way, they can use the Spring Festival holidays to prepare for the new product launches," said Rao Da, secretary-general of the association.

"Also, the demand for passenger cars for family use on free-toll expressway trips during the three-day Tomb Sweeping Festival holidays also spurred sales. We saw higher growth in the entry-level segment," he added.

Rao also predicted robust growth in April as the Shanghai International Auto Show, which will start on April 21, will further boost consumption enthusiasm with new models expected to be launched by nearly all the brands.

"If the government doesn't implement measures to curb growth in the automotive industry, which has brought high pressure to traffic and the environment, passenger vehicle sales, excluding minivans, will surpass 1.2 million units in April," Rao said.

In 2010, China had 90 million vehicles on its roads, and the figure surged to more than 120 million by the end of last year, according to the association.

Rao said that the number of cars is expected to be between 260 and 330 million in 2020, with 70 percent of the vehicles in cities.

"Take Beijing as an example. In four to seven years, the capital will face serious traffic jams, which will have a heavy impact on employees' efficiency and economic development," he said.