BEIJING - The
automobile industry remains one of the hot sectors
in China despite a slowdown.
The
competition in the auto industry is growing
fiercely and shifting to competition among
regions, according to some reports. Currently, 27
of the 31 Chinese provinces are producing motor
vehicles, of which more than half claim autos as
their leading strategic industry. And many
provinces plan to enlarge the scale.
By
2010, Jiangsu province plans to produce 1 million
motor vehicles, as does Zhejiang province, which
mainly develops sedans and passenger buses with
Geely Holding Group and Jinhua Automobile as as
its backbone enterprises, as well as Anhui
province, which focuses on developing sedans and
trucks
with
Chery Automobile and Anhui Jianghuai Automobile as
its leading producers.
Shanghai, home to
Volkswagen and General Motors plants, is expected
to produce 1.5 million vehicles; and Jilin
province - home to the First Automotive Work -
will report an output of 1.7 million vehicles.
To achieve their goals and attract more
enterprises and capital, local governments are
offering preferential land and taxation policies
or other incentives.
It is foreseeable the
competition will be further regionalized in the
coming years. Such regionalized competition will
inevitably lead to industrial duplication, experts
say.
Professor Song Ximeng, of Harbin
Engineering University, believes the Chinese auto
industry needs effective coordination and support
of the government if it is to mature.
On
one hand, local governments' desire to develop the
auto industry undoubtedly will play a positive
role in developing necessary related industries,
an expanding market and technical support, which
is conducive to the rapid development of big
enterprises. On the other, the strength of big
enterprises will aid local governments in
cultivating a local auto parts and component
sector and service market, promoting development
of the local industry, adding tax revenue and
raising the employment rate.
But there are
widespread concerns. China's auto industry is so
scattered that many locations are competing.
Scattered auto projects that are mainly driven and
supported by local governments and lie outside the
industrial center face increasing risks.
Regionally centralized development is an
inevitable road for the industry.
A report
released by the State Council's Development and
Research Center predicts that the next 10-20 years
will be a period of regional consolidation for
China's auto industry, and it is possible for
China to form several regional auto industry
clusters around its major auto groups to gain an
international competitive advantage.
It is
not easy to shift from scattered regional
competition to regional clustering development.
Strengthened macro-control and effective measures
are needed to guide local governments to draw up
competitive industrial plans, abandon blind
development and halt impulse investment in the
industry.
To change the regionalized
industrial competition pattern dominated by local
governments doesn't mean to diminish the role of
local government, but to change their role and
function, said an official with Jilin Provincial
Office of Auto Industrialization.
Local
government should get away from using its
administrative power to participate directly in
the development of the auto industry, and instead
position itself as a cultivator of supporting
industries and services to large auto enterprises,
the official said.
