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Buyers go bananas over luxury vehicles
By Lao Gong (China Daily)
Updated: 2004-06-17 11:13

"The luxury car market has huge potential in China as face-loving Chinese people are getting richer and richer, and luxury cars are one of best options to show off their success," said Yale Zhang, a Shanghai-based manager of CSM Worldwide Corp, a US auto consulting firm.

"Wow! You see the car is so distinguished! It will be very great to drive such a car. I will surely buy one if I am rich enough one day," said a visitor surnamed Wan, standing in front of the Jaguar stage.

However, "the luxury car segment is much less competitive than the low and medium segments in China and prices are expected to decline sharply in the segment in around three years with increasing competition between manufacturers," Zhang told China Daily.

Meanwhile, the Chinese Govern-ment appears not to encourage the use of luxury sedans.

The new auto policy, launched at the beginning of this year, says the government encourages customers to use low-emission and low-pollution cars to realize a "balance between urban transportation, environmental protection, energy saving and auto industry development."

"The government should take market-oriented measures, especially in taxation and charges, to limit the use of luxury cars," said Chen Qingtai, deputy director of the Development and Research Centre of the State Council, China's cabinet.

Chen also suggested the government should encourage domestic automakers to develop and make cars suitable for China's resources and conditions.

China is suffering increasing oil shortages, and transportation and environmental conditions are becoming worse in many big Chinese cities.

But foreign car makers still see huge potential in this market and competition in this field is becoming fierce.
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