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New models to compete in economical car market
Last Updated(Beijing Time):2008-09-11 10:13

Economical cars priced around 100,000 yuan ($14,622) will take lead in the auto market for the remainder of the year, the Beijing Morning Post reported Wednesday.

The Ministry of Industry and Information Technology granted production permits to 27 car models.

About 10 are brand new models with engine capacities ranging from 1.3-liter to 1.8-liter, according to a paper on vehicle manufacturers and products released recently by the ministry.

Domestic car brands are keeping pace with joint venture brands on the approval list.

FAW-Volkswagen, a joint venture between leading Chinese auto maker FAW and German auto giant Volkswagen, is going to launch its new Magotan FV7187 and FV7207, which according to analysts will be equipped with the latest dual-clutch gearbox (DSG) transmission technology. Changan Ford's new Carnival models, with an engine capacity of 1.3-liter and 1.5-liter are also on the list, following Fords launch of the face-lifted Focus earlier this month.

Among domestic brands, two Jianghuai Auto's A-class sedans with engine capacities of 1.3-liter and 1.5-liter got production permits, and are set to be on market this month. Meanwhile, Southeast Motor also sees its first independently developed compact sedan permitted.

Besides the new models, other previously permitted models will also be available in the market in September or October, livening the sluggish auto market in the first half.

Dongfeng Citroen's C-Quatre, the Chery A3, new Bora, and Focus 08 will rush into the economical car market in September, together with the ChanganV101, Zhonghua Grandeur Wagon, and Skoda Fabia. The expected prices range from 80,000-160,000 yuan.

However, due to a lackluster first half year, the market is still facing pressure from unsold stock of old models. Dealers are looking to mark down prices for these models in an effort to meet their sales target, and the new models are likely to enter a price war.

The adjusted auto consumption tax that has taken effect since September 1, raises tax rates on big cars with an engine capacity above 3.0-liter. However, the tax rate remains unchanged for those with an engine capacity between 1-liter to 3-liter, and more favorable to cars with engines below one liter. The policy changes could have a positive effect on economical cars as price-sensitive consumers may turn to this sector in concern at the rising cost of vehicle ownership.

Sales of vehicles with engine capacities ranging from 1.3-liter to 1.8-liter took up 61.20 percent in the overall market in July, according to, a media channel specializing in the automotive industry. 
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