China established itself as the most shinning example in vehicle sales despite more and more overseas car makers making inroads into the country, banking on price-competitive models to cash in on market potential.

Vehicles are seen along a road in Shenyang, northeast China's Liaoning province December 11, 2006. November car sales in China, the world's second-largest vehicle market, rose 26.41 percent to 499,700 from a year earlier, the country's official industry association said. [Reuters]

With the influx of new players releasing new models, competition became fierce, dragging down prices.

Growing maturity, to accompany the burgeoning sales, may be the best way forward for China, which is the world's second-largest auto market.

Shanghai Daily has selected the top 10 auto news stories of this year to give readers an overview of the whole industry. Numbers six to 10 will be published next Wednesday.

Buoyant vehicle sales help to boost profit

The market made a U turn this year, with an unexpected sales spurt after growth had slowed down in the past two years. China's vehicle makers sold more than 6.45 million units, including both passenger cars and commercial vehicles, for the first 11 months this year, an increase of 25 percent from a year earlier.

Whole-year sales are expected to top seven million units this year, helping the nation to replace Japan and seal the position as the world's second-largest auto market behind the United States.

The soaring sales growth played an important role in increasing car makers' profit. China's auto industry saw its profit rocket 47.5 percent to 52.9 billion yuan (US$6.6 billion) for the first three quarters year on year.

Move aids popular small-engined cars

China reduced an excise tax on compact cars with 1.5-liter or smaller engines from five percent to three percent after a new tax policy went into effect on April 1 this year.

By comparison, higher taxes were levied on sports utility vehicles and gas guzzlers with engines larger than 2.5 liters, including an increase from five percent to up to 20 percent on the value of the vehicle.

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