The bureau's latest statistics show that 1.36 million cars were sold in China during the first four months this year, with about 60 percent bought by individuals.

Driven by the strong growth in car sales, the income from auto sales has surpassed that of the textile industry and electronics manufacturing, making auto industry a major industry.

Some 80 billion yuan (9.6 billion US dollars) was spent on cars by individuals in China during the first four months, according to the bureau.

However, analysts said there was still great potential for China's car industry.

"The car-buying trend will certainly continue to soar and the auto industry will witness an explosive growth in China's major cities in the coming years," said Zhang Xiaoyu, deputy director of China Machinery Industry Federation.

"According to international experience, householders begin buying cars as necessities when a country's per capita gross domestic product (GDP) reaches 1,000 US dollars," Zhang said.

The auto industry would expand at an explosive rate when the per capita GDP reached 3,000 US dollars, Zhang said, adding that major cities like Beijing, Shanghai and Guangzhou were in their explosive growth stages when it came to cars.

The National Bureau of Statistics predicts China's annual car output will reach 4.5 million in 2003, surpassing France and making China the world's fourth major car producer.

The bureau said the growth of sedan production would lead the development of China's auto industry over the next 20 years and annual sales of China-made cars would top 10 million by 2010.

Most cars in China were usually bought by governmental institutions and companies in the past, but individuals have became the major car buying group in recent years.

Market analysts said China should do more to reduce or even abolish some car taxes to further continue this rapid growth trend.

"As cars have become major consumer goods, new policies on car consumption should be made to encourage individual consumption," Zhang said.

(Xinhua News Agency June 14, 2003)