China's car output capacity to have an 8 million units surplus by 2010

China's car output capacity in 2010 is expected to reach approximately 18 million units, including 10 million sedans. The consumption will reach 10 million. As a result, the surplus production capacity will be 8 million units, said Cao Yushu, deputy president of the China Macroeconomic Research Association on Saturday at the 2006 high-level forum on the development of enterprises.

Cao Yushu believes that auto industry is just one of many sectors with surplus production capacity in the country. An 8-million auto production capacity is under planned construction in the country for the next five years, according to the 11th Five-Year Plan drafted by the 32 major auto-producers in the country.

Cao went on to say that China's car sales this year are expected to reach more than 5 million units. The initial estimation is that China auto consumption will be 10 million units in 2010, reflecting a great gap between supply and demand.

It is introduced that for the present, China's auto production ability is 8 million units with a surplus of 2 million sets.

Cao Yushu adds that there appear output capacity surpluses in 11 sectors, involving cement, electrolytic aluminum, iron and steel, and calcium carbide. The scenario where power supply rises and power demand declines will be seen in the years to follow and will lead to over capacity.

In the meantime, the power shortage in the recent years has boosted coal production apparently. It is expected that China's coal output in 2010 can reach 2.7 billion tons. However, the demand for coal will be likely to stand at 2.45 billion tons by then, leaving excessive supply of more than 2 billion tons in five years.

By People's Daily Online