Beijing's car market is preparing to meet head on the new challenges sparked by Monday's deal between China and the United States concerning China's entry of the World Trade Organization (WTO).

Car dealers, market managers and potential buyers yesterday were anticipating forced price cuts while cautious automakers said they still needed to study the details.

Ministries and State commissions are busy preparing to help auto manufacturers and trading companies look for ways to meet the new challenges.

The motor sector, which has cried wolf over free trade for the past decade, still seems startled by the deal.

A spokesman for the State Administration of the Machinery Industry said they needed time to assess the impact of the WTO deal.

The motor sector is expected to be hit head-on by the impact of free trade after China's WTO entry, which is expected early next year.

More than 120 independent plants assemble motor vehicles in China.

Long-awaited price cuts could come earlier than expected, Su Hui, general manager of BAGVAE, the biggest automobile exchange in the capital, told a seminar yesterday.

China imposes 80-100 per cent tariffs on imported passenger cars. This has kept prices of cars made at home high despite consumers' complaints.

Vehicle sales over the past two days at the exchange have not fallen, but Su said this time of year usually brought robust sales. The customers will benefit from the WTO entry in the long run, Su added.

The seminar, which focused on sales of imported cars, was attended by representatives from General Motors, Toyota, Mercedes-Benz, Honda, Citroen, Fiat, Renault and Mitsubishi.

Outside and inside the seminar, the talk turned to governmental tariffs or non-tariff measures to guard the auto sector.

Dump selling of automobile issues pulled down the stock markets in Shanghai and Shenzhen on Tuesday.

The selling turned contagious and auto market managers said they feared the stock market would further dive.

Su said he anticipated price cuts on vehicles also as stockpiles increase. The industry is currently running at just half its manufacturing capacity.

Against the slack market was the recovery of imported cars due to bans on domestically-made cars that did not pass emission tests.

Su pointed out that foreign auto dealers had regained confidence.

Sales of imported cars between January and October at the exchange were about 3,200 units, compared with 2,600 during the same period last year.

Total sales in the marketplace were 24,000 units, 24 per cent less than the same period last year.

(China Daily)