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Last updated at: (Beijing Time) Tuesday, April 06, 2004

Major changes in auto industry since China's WTO entry

Since China's entry into the WTO, the once highly protected Chinese auto industry has gained its strength and competitiveness by fully taking advantage of protective measures in the transition period. Big changes have taken place in the following seven aspects of the industry.


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Since China's entry into the WTO, the once highly protected Chinese auto industry has gained its strength and competitiveness by fully taking advantage of protective measures in the transition period. Big changes have taken place in the following seven aspects of the industry.

1. Rapid increase in auto manufacture and sales: 4.44 million autos were produced in 2003, a net increase of 2.1 million as compared to that in 2001. The increment mainly came from the sedan cars, constituting the major source of increase in the industry.

2. The product structure has become more reasonable. In 2003, the proportion of sedan cars rose greatly. Output of sedan car amounted to 44.5 percent in overall auto output, nearly 15 percent higher than 30 percent in 2001.

3. The industry turned out more centralized. The output and sales of ten major automakers including FAW, Dongfeng, Shanghai Automotive Industry Group takes nearly 80 percent. Ten major manufacturers of sedan car have won 80 percent nationwide in terms of car output and sales.

4. Profit of auto industry rose notably.

5. New products, especially sedan cars were continually released. In 2002 and 2003, about 80 types of new sedan cars were released in 2002 and 2003.

6. Auto export remained a high-speed increase. Statistics from customs shows that export of auto and auto parts reached USD 4.7 billion, 34 percent up over last year.

7. The industry has made great progress in restructuring. Since China's entry into the WTO, reorganization, joint venture and cooperation centered around three major auto groups have been in full swing. The transnational corporations that have entered Chinese market have expanded their investment and extended their contracts. Corporations that have not entered the market are actively seeking for opportunity to enter. With the entry of transnational corporations, auto parts makers have come one after another. Enterprises in other industries started to make their accesses to the auto industry. Private capital and capital from private run enterprises start to participate in stock reconstruction of the state owned auto enterprises. The state owned auto enterprises have quickened their paces in reform.

Despite the great progress made by the auto industry in these two years, there is still a great gap between China's auto industry and international level. The industry is weak in developing new products and the infrastructure for manufacturing accessory parts needs to be strengthened. Major auto enterprises are still small in terms of scale. The auto industry is still mired in a "scattered, chaotic and inferior" state. The industry is too dependent on foreign brands. The consumption environment for autos needs to be improved.

By People's Daily Online


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