Nation aims to be a global vehicle powerhouse

Rules on domestic- foreign JVs will ease as domestic brands rise

China aims to become a global vehicle powerhouse within 10 years through technology transformation and upgrading, according to a plan on the development of the automobile sector jointly released Tuesday by three government departments.

With urbanization and industrialization accelerating, China’s vehicle output will continue to grow steadily to a target of 30 million by 2020 and 35 million by 2025, according to the plan published on the website of Ministry of Industry and Information Technology ( MIIT).

In 2016, China’s vehicle sales reached 28 million, ranking No. 1 in the world for the eighth straight year. Domestic brands, which have received rising market recognition, accounted for about 50 percent, according to the MIIT.

It said that the output of new- energy vehicles ( NEVs) is expected to reach a record of 2 million annually by 2020, but that won’t happen easily, said Yale Zhang, managing director of Shanghai- based consulting firm Automotive Foresight.

NEVs in China cost two or three times as much as conventional vehicles of the same size, Zhang told the Global Times on Tuesday.

“Time is running out for Chinese NEV producers to cut costs before the government phases out subsidies by the end of 2020, as the subsidy is a major reason for customers to buy NEVs,” he said.

The MIIT also said that the cap on foreign investors’ stakes in vehicle joint ventures will be phased out in an orderly way, and domestic and foreign investment management over the industry will be improved.

Currently, domestic brands’ market share in China is about 40 percent, Zhang said. “It isn’t safe yet to open up the whole market to foreign automakers due to the complexity of the market.”

Once domestic auto brands’ market share reaches 50 percent to 60 percent, China’s auto market will become more open to foreign brands, he added.

At present, overseas carmakers, such as General Motors or Nissan Motor Co, are limited to a 50 percent stake in a Chinese joint venture, Reuters reported on Tuesday.

The country will seek break- throughs in core technologies and increase the share of Chinese automobile brands in the international auto market by 2025, and it will also look to export automobiles to developed nations by 2020, according to the plan.

As the vehicle industry is increasingly linked with emerging industries like the Internet, the global auto ecosystem will be reshaped, said the MIIT.

China will focus more on advanced technologies to build a comprehensive industrial chain, including NEVs, smart cars and fuel- efficient cars, it said.