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Car making has become the fifth-largest Chinese manufacturing industry, the National Bureau of Statistics said Monday.

Jiang Yuan, an official with the bureau's Industrial and Transport Statistics Department, said motor manufacturing has become a leading contributor to the country's economic development after decades of fast growth.

The industry's sales income accounted for 5.2 per cent of all industrial sales last year, up from 2.2 per cent in 1990 and 4.4 per cent in 2001.

The ratio rose to 6.2 per cent during the first quarter of this year, Jiang said.

In terms of sales income, the car industry ranked fifth, after only telecommunications and electronics equipment, electricity generation, ferrous metals and chemicals, he said.

Since 1999, the car industry has grown more quickly than the industrial sector as a whole, Jiang said.

The sector contributed 11 per cent to the manufacturing industry last year and 13.6 per cent during the first quarter of this year.

"China's auto industry is entering a fast-growing period,'' Jiang said.

Jia Xinguang, chief analyst of the China National Automobile Industry Consulting and Development Corp, said the fact that an increasing number of affluent people have begun to consider buying their own cars provides the industry in China with excellent opportunities.

Experience from developed countries suggests that demand for private cars speeds up when a country's per capita gross domestic product (GDP) reaches US$1,000. China's per capita GDP reached that level last year.

The price wars of the past few years also helped lower car prices to relatively reasonable levels, Jia said.

Total sales of Chinese-made cars are expected to exceed 4 million units this year, up from 3.25 million units last year, Jia said.

China needs to map out a new automobile consumption policy to further encourage car sales and production, said Niu Li, a senior economist with the State Information Centre.

"Although car prices have dropped, the fees and taxes for consumers are too much,'' he said.

Jia said the fees and taxes for car purchases in some Chinese provinces accounted for about 50 per cent of the final price.

This compared to 15 per cent value-added tax in Germany, 10 per cent consumption tax and purchasing tax in Japan and 6 per cent sales tax in the United States, he said.

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