China Auto industry drives past major milestone

(chinatrucks.com, Oct. 21, 2009)China's auto industry yesterday sped past an impressive milestone as the 10-millionth vehicle - a heavy-duty "Jiefang" truck - rolled off the production line.

The unit, which was produced at FAW Group Corp's factory in Changchun, made China the third country - after the United States and Japan - to produce 10 million vehicles this year. Auto output in both the US and Japan has geared down this year because of the global economic slowdown but, in China, the industry is booming.

Industry officials and executives attending the ceremony marking the milestone predicted that China will produce more than 12 million units in 2009, up from 9.35 million last year.

Miao Wei, vice-minister of Industry and Information Technology, said the production of 10 million vehicles means China is becoming a global player in the auto industry.

"To be a strong player, China has to meet three requirements - it must have internationally competitive automakers and brands that use resources at home and abroad, it must grab significant market share abroad, and it must grasp core and new technology," said Miao, who was previously president of the Dongfeng Motor Corp, one of China's largest auto makers.

Foreign brands, including Volkswagen, General Motors and Toyota, currently account for two-thirds of China's passenger car market.

Despite the global financial crisis, China's vehicle market has been growing rapidly this year, being driven forward by the government's stimulus spending.

Sales in China surged by 34.24 percent year-on-year to 9.66 million units in the first nine months, according to the China Association of Automobile Manufacturers.

In January, China halved the purchasing tax - to 5 percent - on vehicles with an engine capacity less than 1.6 liters. The central government also earmarked a total of 5 billion yuan ($735 million) this year to subsidize rural buyers of minibuses and trucks.

Dong Yang, vice-chairman of the auto association, said the industry is "strongly" hoping the government will keep the incentives in place next year to continue to promote auto sales.

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