People have mixed sentiment on China's auto market

China's rapidly-growing auto market has boosted confidence within the industry. Many car makers say they are optimistic about a further rapid growth this year. But some dealers have a different opinion.

China's rapidly-growing auto market has boosted confidence within the industry. Many car makers say they are optimistic about a further rapid growth this year. But some dealers have a different opinion.

China has overtaken the US as the world's largest auto market, and the industry is showing no signs of slowing down. Major domestic auto makers have positively adjusted their sales targets for this year.

In 2009, domestic car makers accounted for 30 percent of China's total auto sales. Many car makers expect this growth to continue in 2010.

Yin Tongyue, the general manager of Chery Automobile said, "The rapid growth extended into the first quarter of this year. Our delivery volume during this period surged around 76 percent year-on-year."

The growth has also been matched by the luxury car market. According to marketing research firm J.D. Power, all luxury car makers have reported double digit and even higher sales growth so far this year.

The vice president of Toyota Motors China Zeng Lintang said "Our sales surged by 121 percent in the first quarter of this year. This is very encouraging for us."

However, auto dealers don't share the same optimism. With increasing output capacity and more discerning consumers, dealers have been hurt by their mounting stockpiles.

Figures from the China Association of Automobile Manufacturers show that stockpiles of passenger vehicles increased by more than 30-thousand cars last month.

An auto dealer said "Our stock so far has almost reached its critical point with a 10 percent growth. We are now offering sales promotions for every model we have."

Analysts say it's unlikely the domestic auto market will build on last year's explosive growth.

"Some dealers have felt the pinch of increasing stockpiles, as auto makers set higher targets for production. It's impossible for the market to realize a 40 percent increase as last year." said Guo Yong, an analyst of Beijing Yayuncun Auto Market.

Many dealers are offering hefty discounts, free insurance and gifts to people who test drive in a bid to boost sales.