China's Vehicle Output Ranks World Fifth

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Last updated at: (Beijing Time) Tuesday, January 14, 2003

China's Vehicle Output Ranks World Fifth

2002 saw China surpass 3.25 million in its auto-vehicle output, an increase of 38.5 percent over the same period of the year before. The vehicle output and sales have risen to the 5th place of the world from the 8th in 2001 while the auto output from the 14th to the 10th place of the world.

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2002 saw China surpass 3.25 million in its auto-vehicle output, an increase of 38.5 percent over the same period of the year before, of which the sedan-car was added up to 1.09 million, a growth of 55 percent, hence telling an unprecedented speed.

Some 40 years elapsed when China's vehicle output and sales reached one million in number and it again took 8 year to go from 1 million to 2 millions. But only 2 years are spent for China's auto output to exceed 3 millions. According to the "10th Five Year Plan" published in July 2001China's vehicle output and sales were expected to break through 3 millions0 by 2005. However, only one and a half year has passed before the goal of 3 million vehicles was obtained ahead of the schedule. 2002 saw China's vehicle output and sales be raised to the 5th place of the world from the 8th in 2001 while the auto output from the 14th to the 10th place of the world.

According to the figures of the State Statistic Bureau the contributions made by the transportation equipment manufacturing industry of the vehicle industry to the growth of the whole industry during the previous 10 months of last year came to 13.3 percent. It pulled the industry to grow by 1.65 percentage points, taking up the 2nd place and the contribution to the growth of the industry profit was 22.5 percent, ranking at the top of the industry. The vehicle industry has, so to speak, become in name as in reality a motive force for the growth and enhancement of efficiency of the industry.

The vehicle industry played a more outstanding role in expanding the domestic needs and stirring up consumption. A consuming rate of the commodities in society brought out by the State Statistic Bureau tells that the vehicle consumption increased by 1.4 times in 2002, topping all other commodities in that year.

As one of the industries bearing the brunt, which road was China's vehicle industry going to take after China's WTO entry? Whether the auto market would become languid? These were topics ever been concerned and always on the lips of the people. What was the reason behind it that helped the explosive increase of the vehicles, especially the car market?

Chen Hong, General manager of the General Motor Co. in Shanghai holds that the high growth is the result brought about jointly by many favorable factors. First of all, the Chinese economy spelled out a strong growth as a whole, showing an annual GDP increase of 8 percent, people's income going upwards while the price for vehicle was going down. All this has greatly raised the purchasing capability of the common people. Secondly, people came to understand fully that the auto price wouldn't see a drastic downturn immediately after China's entry into the WTO and so people's demands for autos simmered, money in hand, for years was given a free rein. Thirdly, a new environment has come to appear for the auto-consumption.

Of course, a favorable situation couldn't be separated from the endeavors of the auto enterprises. 2002 saw run through the whole year the acquisition, reorganization and/or forming joint-venture partner among auto-enterprises. The beginning of the year started the reorganization of the East Wind, the Pride and the Kia Motor Cos. and by the end of the year we saw Shanghai General Motor acquired the auto-body project of Yantai. In view of the market needs, the three auto groups of FAW, East Wind and Shanghai Motor Co. set out one after another to adjust and reorganize the resources at home. So far, the three big auto groups have amassed about 50 percent of auto production in China, and plus other 6 major enterprises, the concentration of auto production has now come to over 90 percent.

In the meantime when the three big groups were expanding themselves, they stepped up the cooperation with foreign capitals. The FAW joined hands with Toyota and East Wind had a full cooperation with Nissan and with PSA Group too while Shanghai Motor expanded its cooperation with Volskwagen. All transnational auto cos. have been introduced into China. The most direct effect of joint venture and cooperation manifests in the high frequency of bringing the new autos into the market with an enhanced service level, providing consumers with diversified choices. According to statistics, we saw being brought into the market almost 30 types of new cars, which has taken up more than 60 percent of the car market.

According to the estimation of the National Information Center the country sees an auto-need of 3.8 million in 2003, an increase by 20.6 percent as against the same period of last year, of which the homemade car will come to 1.435 million, an increase of 26.4 percent on that of the same period. Does the auto market look really so good this year?

"The fine perspective of the auto market in 2003 is based on the following reasons". Zhao Zengjun, Director of the marketing department of the FAW - Volskwagen holds that the macro-economy tends for the better and the construction of a well-off society as a whole has provided a prerequisite and basis for the development of the auto industry. Besides, next year won't see a big margin of reduction in custom-tariff and so the imported car won't entail a big impact on the auto market. The progress of auto-credit business and second-hand car market will all serve to promote the development of the auto market.

Of course, a fine trend must be paired with good policy. Gan Zhihe, Deputy secretary-general of the State Economic and Trade Commission pointed out that China is not only a potential market for auto industry but also a market in reality in which it sees a great attraction and a fastest speed for development.

As learned, to support the development of the auto industry, the government departments concerned will put forward four related policies. They are, "policy for auto consumption", "regulation for management of auto-industry investment", "relevant regulation on further promotion for the development of auto industry" and "management measures on financial organs of auto industry and auto-loan for individuals".

By People's Daily Online

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