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April 26, 2017

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China aims to be auto powerhouse

CHINA is aiming to become a world automaking powerhouse in a decade, vowing to boost development of new-energy vehicles and relax restrictions on foreign ownership in the auto industry.

The country will strive to achieve breakthroughs in key technologies and markedly increase the share of Chinese brands in the international auto market by 2025, according to an auto industry development plan released yesterday by three government departments, including the Ministry of Industry and Information Technology.

China is the world’s largest auto market but lags behind frontrunners in core technology, parts and components production, innovation and brand development.

The plan set the target that China should “enter the ranks of world automobile powerhouses after 10 years of sustained efforts,” saying the country’s auto industry is “large but not strong.”

It also noted the risk of overcapacity in the industry and concerns over energy, environmental and traffic problems arising from the huge number of cars hitting the road.

The government pins hopes on NEVs and “smart” cars to upgrade the industry and catch more advanced countries, according to the plan.

Sales of NEVs should reach 2 million by 2020 and account for more than 20 percent of total vehicle production and sales by 2025, the plan said.

That number is about four times the current level. China sold 507,000 NEVs last year, the most in the world for a second year and up 53 percent from 2015, according to the China Association of Automobile Manufacturers.

NEV sales have risen dramatically on the back of government policies, but still represented under 2 percent of China’s overall auto market last year.

There should be several Chinese NEV firms that are strong enough to rank among the world top 10 by 2020, and their global influence should further rise by 2025, according to the plan.

It said highly and fully autonomous cars will start to enter the Chinese market by 2025, when 80 percent of new cars should be equipped with driver assistance systems or certain types of self-driving systems.

Internationally competitive producers of auto parts and components will emerge in the country, smart industrial chains will be developed, while car fuel efficiency will be increased, the plan said.

It noted restrictions on foreign ownership in joint-venture carmakers will be relaxed “in an orderly manner.”

China caps foreign stakes in joint ventures in the domestic auto industry at 50 percent.

Auto sales in China hit a record high of 28.03 million in 2016, up 13.7 percent year on year and ranking the first among all countries, according to CAAM. About half of the total were Chinese brands.

The plan predicted China’s annual auto output to rise further to 30 million by 2020 and 35 million by 2025, on demand from rapid urbanization and overseas emerging markets.


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