The automotive industry is one of China’s designated ‘pillar’ industries. It accounts for between two to four per cent of China’s total industrial output and employs approximately 300,000 people within 130 key automotive original equipment manufacturer (OEM) companies. It is predicted that China’s vehicle production is estimated to grow to eight million vehicles by 2008-2010.
The manufacturing of passenger cars is one of the national priorities, particularly in Shanghai, Changchun, Wuhan and Guangzhou where dominant international players such as Volkswagen, General Motors, Citroen and Honda have established production facilities.
In addition to those major players, many local automotive manufacturers such as Chery Auto, Geely Auto, Zotyr Auto, etc are growing quickly. Chery plans to raise its annual automotive output to 1 million vehicles by 2010. Chery’s current annual automotive production is around 400,000 vehicles.
China’s automotive component industry is quite segmented with approximately 2000 large and medium-sized automotive component manufacturers. There are also over 1000 small manufacturers across China operating under separate industry administrations but supplying to the automotive industry. The industry is focused on safety systems, new material utilisation and environmentally friendly technologies such as alternative fuel systems for motor vehicles.
China’s automotive industry has undergone major restructuring at the central government level and the State Economy and Trade Commission is now responsible for the industry in terms of ‘macro’ planning. This move is seen as a ‘decentralization’of power to provincial government and automotive industry departments.
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