China plans to produce two million motor vehicles this year, including 700,000 cars. To meet this target, the country will reform taxes and levies on purchases of motor vehicles, and adopt measures to support manufacturers to produce economy cars, said an official with the State Administration of Machinery.

During the 1994-1998 period, the country's auto industry entered a period of readjustment, with an annual growth rate of between three and five percent.

Organizational restructuring of the firms, as well as changes in the product mix and the nature of the market were brought about during that period, the official said.

In recent years the central government has supported three major automakers, the Shanghai Auto Group Corp, Dongfeng Auto, and Number 1 Auto.

With improved living standards, millions of Chinese families now have their own cars, and the numbers are increasing daily. Statistics show that of all the cars sold in the country nearly a half are bought by families.

In 1999, the country produced 1.8 million motor vehicles, up ten percent over the previous year.