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Rao Da: Government policy a decisive factor to auto industry

BEIJING – “Government policy is the wind vane of the China auto industry,” said Rao Da, chairman of China Passenger Car Association. For example, to ensure GDP growth and employment, policies such as increasing vehicle usage costs are still unavailable today. A policy on increasing fuel taxes could be introduced by year’s end, predicted Rao. A 10 percent growth is still possible in 2014 and new auto industry policies are expected to be released in the second half of 2014.

The 50:50 equity share requirement on JVs will remain intact for some time. Chinese independent brand sales have been severely affected as more cities launch vehicle purchase restrictions. The trend will not be reversed until next year at the earliest, said Rao.

Sales growth rate of passenger vehicles (excluding microvans) made by wholly-owned companies under the six state-owned automakers topped 37.3 percent last year, thanks to their large R&D investment. These enterprises will play a more important role in the future, said Rao.

Future competition will focus on technology and quality, not price, said Rao. State-IV emissions standards for commercial vehicles will go into effect in 2015 and China will accelerate vehicle scrapping programs and charge fees on those vehicles which fail to meet required emissions standards. State-V emissions standards for passenger vehicles will be implemented in 2018 and phase IV fuel consumption limit will be carried on starting from 2020. Fuel taxes will be increased on a yearly basis to reduce traffic jams, haze and fuel consumption.

NEV commercialization will be accelerated. NEV parc are estimated to be over 5 million units by 2020. Auto sales will be over 32 million units in 2020, twice of those in the U.S. Vehicle parc will be 250 million units by 2020 with expressway mileage surpassing 150,000 km that year. Import and export volume will both reach 2 million units in 2020. Scale of China’s auto market will be over 50 million units per year in the future. Vehicle parc will be over 700 million units and form huge aftermarket opportunities.

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