30-12-2006 CHINA
has unveiled a blueprint for the auto industry that, among other things, aims
to head off oversupply, and encourage the development of self-branded models. The
National Development and Reform Commission yesterday outlined a wide-ranging new
vision on its Website. Measures
for China, the world's second largest auto market, include: Raising
market thresholds for new vehicle projects. Encouraging
the development of fuel-efficient and environmentally friendly models; and Industrial
consolidation to enhance competitiveness in the industry. The
commission said oversupply has a negative impact on industrial consolidation and
product base, dampening the sustained growth of the whole industry. Chinese
auto producers setting up new plants are required to turn a minimum of 80 percent
of their design capacity into sales, it said. The
Chinese auto industry slowed down after stricter regulations on new investments
were introduced in 2004 after warnings of the possibility of oversupply. However,
the market has picked up since the second half of last year and car makers have
revealed aggressive expansion plans. The
nation had the production capacity for eight million units annually by July last
year, and has another 2.2 million units under construction. At
that rate China will top the magic 10-million figure by next year. "The
market demand is expected to be stable in the following years, and the looming
overcapacity will become true by 2010 on the basis of investment planning by car
makers," the statement said. Vehicle
production is expected to surpass seven million units this year, up 25 percent
from a year earlier, according to the China Association of Automobile Manufacturers. Meanwhile,
self-branded models will be center stage over the next few years as the nation
plans to increase competitiveness of the industry after long-term cooperation
with foreign counterparts. Domestic
auto makers are being urged to stand behind their own brands in self-developed
vehicles. Other
measures outlined include that governments at all levels should take the lead
in buying vehicles that are environmentally friendly - and homegrown.
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