China has unveiled a blueprint for the auto industry that, among other things, aims to head off oversupply, and encourage the development of self-branded models.

Measures for China, the world's second largest auto market, include: Raising market thresholds for new vehicle projects; Encouraging the development of fuel-efficient and environmentally friendly models; and industrial consolidation to enhance competitiveness in the industry.

The commission said oversupply has a negative impact on industrial consolidation and product base, dampening the sustained growth of the whole industry. Chinese auto producers setting up new plants are required to turn a minimum of 80 percent of their design capacity into sales.

The Chinese auto industry slowed down after stricter regulations on new investments were introduced in 2004 after warnings of the possibility of oversupply. However, the market has picked up since the second half of last year and car makers have revealed aggressive expansion plans.

The nation had the production capacity for eight million units annually by July last year, and has another 2.2 million units under construction. At that rate China will top the magic 10-million figure by next year.

The market demand is expected to be stable in the following years, and the looming overcapacity will become true by 2010 on the basis of investment planning by car makers. Vehicle production is expected to surpass seven million units this year, up 25 percent from a year earlier, according to the China Association of Automobile Manufacturers.

Meanwhile, self-branded models will be center stage over the next few years as the nation plans to increase competitiveness of the industry after long-term cooperation with foreign counterparts. Domestic car makers are being urged to stand behind their own brands in self-developed vehicles.

Other measures outlined include that governments at all levels should take the lead in buying vehicles that are environmentally friendly - and homegrown.

Source:佚名