China Uses Green Cars to Bolster Auto Sector
2009-03-27 Source：internet
Summarize：China has announced measures to kick-start domestic automobile demand by encouraging the development of more environmentally friendly cars, the latest move to bolster the Chinese auto industry amid sl ...
China has announced measures to kick-start domestic automobile demand by encouraging the development of more environmentally friendly cars, the latest move to bolster the Chinese auto industry amid slowing sales growth.
The new package, which is supposed to supplement auto-industry stimulus steps announced in January, is designed to keep overall sales in the world's second-biggest car market growing at an average of 10% annually over the next three years, the government said.
The 10% growth target is considered ambitious by some analysts, but if China succeeds, it would have auto sales of well over 10 million units this year, and could displace the U.S. as the world's biggest auto market by unit sales.
January sales in China exceeded those in the U.S., where demand is shrinking rapidly amid the downturn. Some analysts believe U.S. sales may fall to about 10 million vehicles this year.
The latest measures, which appear to be aimed at restructuring the industry over the long term, include 10 billion yuan, or about $1.5 billion, in research subsidies over the next three years to improve Chinese auto makers' use of safety, alternative-energy and other technologies.
Wolfgang Bernhart, a senior executive at Roland Berger Strategy Consultants, said the plans highlight a shift in the country's industrial policy to encourage companies to focus on electric-vehicle technology.
The government wants Chinese auto makers to use the relatively low barrier to entry for electric vehicles to narrow the gap with bigger foreign rivals and guarantee the industry's steady long-term growth, he said.
The Chinese government over the weekend also released details of a similar restructuring and revitalization plan for the steel industry, although most of the contents of that plan had been reported previously.
The new auto-industry plan, announced on the main Web site of China's central government, said China aims to create capacity to produce 500,000 "new energy" vehicles, such as all-electric battery cars and plug-in electric hybrid vehicles. The plan aims to increase sales of such new-energy cars to account for about 5% of China's passenger vehicle sales.
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