China's 2014 auto sales may rise 10%

China's auto market is expected to grow 10 percent in 2014, driven by strong domestic demand. According to data from the China Association of Automobile Manufacturers, the industry experienced a 14 percent jump in 2013, with German car brands claiming the lion's share of the market.

A sales outlook of 8 to 10 percent growth has certainly perked up Chinese automakers, seeking to sustain last year's high-speed comeback. The industry secured a 14 percent growth in 2013, largely sustained by revived manufacturing activities. The strong demand is looking to continue into the new year, underpinning by China's 7.5 percent GDP growth prospect.

"The government is going to maintain its macro economic policies, this would boost consumer confidence. Chinese residents' income will go up steadily in 2014, this would support their demand in changing new cars, or buying extra ones," Shi Jianhua, Deputy Secretary General of CAAM, says.

So exactly how strong will the demand be?

It may go up above 24 million vehicles, with SUVs continue to sit on top of consumers' shopping lists.

"There will be a large amount of SUVs made by several big carmakers coming into the market this year. And passenger cars sales would be growing at a pace of 9 to 11 percent," Shi said.

About the speculation that the government's efforts to tackle pollution would impact car sales expansion in big cities, BMW's China CEO Karsten Engel has this to say.

"We are expected to grow by 10 percent, but we will shift marketing focus to third tier and fourth tier cities," Engel said.

According to the latest regulations, only 600 thousand cars will be allowed to hit the roads here in Beijing. However about one third of this quota will go to new energy vehicles. That is why experts say 2014 will be a year of Electric cars.

"I3 will come out soon in the Chinese market, many people want to have it, but not many can use it," Engel said.

Engel also said BMW is in talks with local governments to build charging points in some Chinese cities. China has seen a 38 percent year-on-year rise of new energy car sales in 2013, with over 14 thousand EV sold last year.