Industry insiders: Auto overcapacity worries unnecessary

13:57, September 13, 2010      

Email | Print | Subscribe | Comments | Forum 

During the International Forum of the China Automotive Industry Development held last week, the issue of overcapacity was a hot topic once more. Although the National Development and Reform Commission (NDRC) has emphasized again that overcapacity must be firmly restricted, other organizations such as the China Machinery Industry Federation (CMIF) and the State Information Center (SIC) hold a different opinion.

Zhang Xiaoyu, president of the CMIF, believes that the current expansion of auto enterprises can be regarded as mild over-investment, and it is normal. The government should guide them correctly, and setting restrictions with simple administrative methods will not work.

Xu Changming, director of the Information Resources Development Department under the SIC, also believes it is unnecessary to worry about the over capacity. On the one hand, China is in its second high-speed development period, and it is expected that China's auto market will expand 15 percent annually over the next 10 years.

The internationally-accepted capacity utilization is 75 percent, but in 2009, the capacity utilization of China's auto industry was around 120 percent, which means China's auto industry was operating at an overload. In addition, 70 percent of China's auto enterprises are foreign-funded, and 30 percent are domestic, Xu said.

"They are all very sensitive to the market, especially local private auto enterprises such as BYD and Geely," he said. "Once the market starts to shrink, the enterprises can quickly adjust their production and development plans. Therefore, the market can flexibly adjust itself according to the production capacity."

Dong Yang, the secretary-general of the China Association of Automobile Manufacturers, said it has been proven in the past years that the NDRC's worries about the over capacity of the auto industry were all unnecessary. The overcapacity issue is not the most important issue of China's auto industry, he said.

"The most important issue is the industrial upgrade issue. We need to promote our technologies, reduce fuel consumption and pay more attention to environmental protection," Dong said.

By People's Daily Online


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • The romantic myth of the Aegean 
The Aegean Sea is between the Greece Peninsula and Asia Minor Peninsula, dotted with many beautiful scenery islands, like a paradise on earth.  The ancient city of Troy in the east coast of Aegean, Turkey, and Mycenaean sites in the west bank of Greece, which have been archaeological discoveries, now are the must visit places in journey of the Aegean Sea. Above, these desolate dilapidated stone, the sunny blue sky and white clouds and vessels roaming at sea, arriving and departing travellers, add more romantic to the sea and the islands.
  • Chinese Permanent Representative to the United Nations Li Baodong (R) welcomes UN Secretary-General Ban Ki-moon in New York, the United States. Sept. 29, 2011. The Chinese permanent delegation to the UN held a reception on Thursday to celebrate the 62nd anniversary of the founding of the People's Republic of China and the 40th anniversary of China's returning to the UN. (Xinhua/Shen Hong)
  • Chinese ambassador to Bulgaria Guo Yezhou delivers a speech during the reception in Sofia, capital of Bulgaria, on Sept. 29, 2011. The Chinese Embassy in Bulgaria held a grand reception here on Thursday to celebrate the 62nd anniversary of the founding of the People's Republic of China. (Xinhua/Wang Meng)
  • A model presents creation by Mexican designer at Mexico Fashion Week, Mexico City, Sept. 29, 2011. (Xinhua/AFP Photo)
  • Tourists walk in front of the Reichstag building in Berlin, capital of Germany, Sept. 29, 2011. Fine weather on Thursday added to the mood of outdoor leisure for residents and tourists in Berlin. (Xinhua/Ma Ning)
  • Dancers from National Ballet Troupe of Spain perform during a rehearsal for the press at Taipei, southeast China's Taiwan, Sept. 29, 2011. The troupe will put on Dualia and La Leyenda, two folk dances here from Sept. 30 to Oct. 2. (Xinhua/Wu Ching-teng)
Hot Forum Discussion