BEIJING—China's vehicle sales will likely grow to about 15 million units this year, a Chinese official predicted, reinforcing expectations of a significant deceleration from the nearly 50% growth in 2009 that enabled China to surpass the U.S. as the world's largest car market.



Chang Xiaocun, head of the Ministry of Commerce's market system development office, said Friday he believes rising incomes and the extension of government support for the auto industry will enable sales to hit the 15 million mark. That would suggest growth of slightly more than 10% from the 13.6 million units sold in 2009.

The official's forecast is in line with projections by many global auto makers, who have forecast growth of 10% to 15% for China this year. Sales in 2009 grew 46%, making China the most important growth market for auto makers.

Analysts have said China's auto sales will slow this year because government incentives last year likely pulled forward demand.

Beijing has narrowed the tax cut for purchases of vehicles with engines of 1.6 liters and under this year, making the sales tax for such cars 7.5%, from 5% in 2009. However, the government has also extended a subsidy program for some car purchases in rural areas, and raised to between $732 and $2,635 the subsidy for a program to encourage drivers to replace older, polluting vehicles, from a previous maximum of $878.

By PATRICIA JIAYI HO
Source: The Wall Street Journal