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China eyes automotive power in 2020

Lu Xi, deputy director of Industry Policy under the Ministry of Industry and Information Technology, said China aims to become a world automotive power by 2020.

“China’s auto industry saw dramatic growth in 2009,” said Lu. “The added value for the whole industry accounted for 2 percent of GDP. Total production value of the auto industry reached ¥1.51 trillion ($219 billion), up 29.8 percent year-on-year, while the auto parts industry registered a total production value of $28.89 billion. In 2009, 13 major auto companies produced 12.59 million vehicles, accounting for 92 percent of the whole industry.”

However, China’s auto industry still faces many problems and challenges, according to Lu. First, oil import dependency reached 50 percent in 2009, while average oil consumption of new cars posted 8.13L per 100 kilometers, much higher than the 5.9L in Japan. Second, independent brands are facing fiercer competition. Last but not the least, industry consolidation has been moving slowly and cross-region M&As still face many obstacles.

In order to realize its 2020 goal, China needs to continue pushing for industry reform and M&As, support independent brands and new energy vehicle development, and encourage exports and long-term investment from foreign brands, Lu said.

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