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Expert Proposes Merger of China's Two Top Auto-Makers
An auto expert has proposed merger of China's two leading motor vehicle manufacturers in order to take up the challenges posed by China's accession to the WTO.
China is entirely capable of building world-class automotive manufacturers on the existing conditions and by reorganization and institutional and technical creation, said Hu Hongmin, a member of the Ninth National Committee of the Chinese People's Political Consultative Conference (CPPCC) now here attending the current annual session of the CPPCC National Committee.
China's accession to the WTO will present both grave challenges and hard-to-get opportunities for the country's automotive industry, the expert said.
It is a strategic goal of China's national automotive industry to build one or two world-class motor vehicle manufacturers, he said.
Hu said that the biggest problem in China's automotive industry is slow development resulting from scatteredness and disorder. The most pressing task for the present is, therefore, should be to realize strategic reorganization to end scatteredness, he noted.
The expert proposed to start with the merger of the two leading motor vehicle manufacturers, the First Auto Works, in Changchun, and the Second Auto Works, in Shiyan City, in central Hubei Province, both boasting strong development capability, economies of scale in production and far-flung marketing and service networks.
Their merger could contribute to the building of the biggest truck producer in the world and to protecting famous brands of China.
The strategic reorganization will in no way affect the strategic alliance and share participation with multinational corporations, he contended. By stressing independence, it does mean to shut the doors. Only by taking the initiative to participate in international cooperation and form strategic partnership with multinational corporations, is it possible to really attain the objective of "having the presence in each other".
He urged Chinese automotive industry to make full use of the favorable conditions offered by economic globalization in its development, including lowering the localization rate, global procurement, full use of domestic and foreign resources and personnel and broadening the financing avenue.
The R&D of the new generation of motor vehicles will have a far- reaching impact on the development of the automotive industry and associated industries, the auto expert said. Most multinational corporations are still in the start-up stage in the R&D of fuel cells, light materials, and vehicle electric controlled power chains. This is an absolutely good opportunity for China's automotive industry. He proposed the inclusion into state key projects for priority development the R&D of fuel cell, which will help resolve the two key difficult problems of energy and environmental protection in the 21st century.
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