Demand for vehicles in China, already the world's largest market for cars, continues to boom. In 2009 China became the world's biggest market for vehicles (including passenger cars, trucks, buses and sports-utility vehicles), surpassing the US for the first time, with total sales of 13.6m, up by 46% on the previous year. Although sales growth in 2010 has decelerated, in the first 11 months of the year sales still grew by an impressive 34% year on year, to reach 16.4m. The strong performance in 2010 has put China on target to achieve more car sales in a year than any other country. The previous record was set by the US in 2000, when 17.4m vehicles were sold.

Sales of passenger cars alone reached 1.34m in November (the largest number recorded in a single month, beating the previous monthly record, achieved in January 2010, when 1.32m cars were sold. Overall, car sales in China in November were up by 29.3% year on year, representing an acceleration from the previous month and the fastest rate of sales growth since April. Part of the reason for the unexpectedly strong growth recorded in November was a rumour that some of the measures introduced to stimulate sales in late 2008 and early 2009 during the worst of the global economic crisis are to expire at the end of 2010. This has encouraged customers to bring forward their purchases to before the end of the year. The measures concerned include a tax rebate for small cars and subsidies for car buyers from rural areas, as well as a scheme under which motorists trading in their existing vehicle for a new one receive a subsidy.

The Chinese government is keen to encourage the development of more environmentally friendly cars and for China to become the green-car capital of the world. The development of a low-carbon economy is set to be one of the main goals in China's next five-year plan, which will cover the period from 2011 to 2015. China arguably already leads the world in several areas of green energy, such as wind power and solar water heaters, and it looks likely that the electric-vehicle market could be next. China has targeted the sale of 1m so-called clean-energy cars a year by 2015. The country also wants to become the world's largest producer of clean-energy cars within the next decade.

Earlier this year the Ministry of Finance launched a two-year programme to promote hybrid-engined cars and electric vehicles in five cities, namely Shanghai, Hangzhou, Changchun, Shenzhen and Hefei. Buyers of domestically built electric vehicles in these cities will receive subsidies to the value of Rmb60,000 (US$8,900) per vehicle, while purchasers of certain Chinese-built petrol-electric hybrid cars will receive up to Rmb50,000 per vehicle. At the same time, the Chinese government is investing huge sums of money in installing numerous recharging points for electric vehicles. At least four cities are currently hosting trials of recharging stations.