China may curb overcapacity of automotive industry

15:43, September 06, 2010      

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As the rapid expansion of the domestic auto enterprises has exacerbated the risk of overcapacity, China must take measures to strongly inhibit the trend, according to Chen Bin, director of the Department of Industry under the National Development and Reform Commission (NDRC).

Authorities, including the Ministry of Science and Technology, the NDRC, the Ministry of Industry and Information Technology and the Ministry of Finance, all support the development of alternative-energy vehicles.

Chen pointed out that China's 30 major vehicle enterprises including 20 domestic automobile enterprise groups and 10 core vehicle enterprises had a manufacturing capacity of nearly 13.6 million vehicles in 2009. The planned capacity for 2015 is more than 31.2 million units, according to a report on the planned capacity of the automotive industry from 2010 to 2015.

The planned capacity during the late stages of the 12th Five-Year Plan period has exceeded the planned data of the 30 enterprises, according to analysis conducted by local related departments.

Chen also said that in order to inhibit the excess manufacturing capacity, the government should first inhibit local governments to blindly set targets for enterprises and to resolutely prevent preferential policies, such as tax breaks and government land to be used to expand enterprises’ manufacturing capacities.

Second, related departments should enhance the monitoring of automotive manufacturing capacity and the utilization rate. By doing so, they can then release information and relevant policies in a timely manner, such as industry sales and production, investment and productivity, the progress of eliminating backward capacity as well as corporate restructuring. Meanwhile, the government should further improve the management of new energy vehicles to prevent launching traditional car projects in the name of new energy vehicles.

Wan Gang, minister of the Ministry of Science and Technology, also said the draft of the "Special Plan for the Development of Electric Vehicle Technology during the 12th Five-Year Plan" has been prepared and China will support the development of electric cars in seven aspects. Chen revealed that key parts of the new energy automotive industry chain were added to the "Industrial Restructuring Guiding Catalog" (2010), which was jointly revised by the NDRC and related departments.

Officials from the Ministry of Industry and Information Technology said that the automotive industry development policy jointly revised by the Ministry of Industry and Information Technology and related departments in 2004 shows that the government will also make every effort to cultivate and develop the new energy vehicle industry as one of the tendencies of the new automotive industry policy.

By People's Daily Online


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