The unfolding global economic crisis keeps introducing shifts in world markets, and change has now come also to a sector where the dominance of the United States was unrivaled for many years – car sales.

The first indication occurred in January, when China overtook the United States to become the world’s largest market for motor vehicles. A total of 735,000 automobiles were sold in China in January, compared with 656,976 in the United States. This jump in sales has been ascribed to the increased purchasing activity in China just before the Chinese New Year, as well as price cuts and government incentives to boost sales of smaller automobiles.

Its clear, however, that this change of the line-up in the car industry is not just a mere coincidence brought on by favorable conditions and timing. Sales of cars in China have surged five-fold in the past decade as the country’s economic boom boosted incomes, especially of the urban middle-class, during which the car has become a must-have accessory for families, up-and-coming young people and officials.

Statistical data of car sales in February confirmed China’s determination to preserve its leading position. On March 10 the China Association of Automobile Manufacturers (CAAM) announced that sales of domestically-made cars rose 12.4% month-on-month and 24.7% year-on-year to 827,600 units in February. The tally for the first two months rose 2.7% to 1.56 million, compared with a 39% decline to 1.35 million in the U.S.

This surge in China was supported by the Chinese government’s continuing policy to stimulate demand, including tax cuts on some models. In particular, China has halved retail taxes on small cars and drawn up plans to provide vehicle subsidies in rural areas.

Taking into account the rapid growth in China during the past two months, General Motors, the biggest overseas automaker in China, raised its forecast for the nation’s market growth this year to a range of between 5 and 10%. During the current recession in the US and EU, when leading global auto companies are on the verge of bankruptcy because of slumping demand, China has an opportunity to become a primary market for them. But traditional giants like GM, Ford, Toyota, Volkswagen and other overseas auto companies operating in China now have to deal with fierce competition not just between themselves, but also with leading Chinese manufacturers.