The Tenth Five-Year Plan of the Automotive Industry and its Development

I. The Tenth Five-Year Plan of the automotive industry

According to the 10th Five-Year Plan, the general guidelines for developing the automotive industry in China during the period (2001-2005) is to meet the ever-increasing needs of the domestic market through opening up and accelerating 'self-development." The development of relevant spare parts will be regarded as the basis and economy cars will be the focus of development. The country will try to hasten product adjustments and upgrades. Large corporations will serve as the backbones, which will be helpful in realizing the optimization of the structure of the automotive industry and achieve mass production.

More national technical centers will be set up to enhance technique-innovation and production-development abilities. Market surroundings will be improved and management based on the legal system will be strengthened to promote fair competition. Greater efforts will be made to try to exert comparative advantages and enhance China's overall competitive ability in the world market.

1. The automotive industry's main tasks during the 10th Five-Year period

(1) China will promote strategic reorganization of the automotive industry and provide support and direction to cooperations between influencial corporations. Powerful corporations will be encouraged and supported to develop further and become bigger and stronger. Distribution of resources will be optimized and a pattern of large automobile corporation groups will be established. A supplementary system of auto parts manufacturing will also be developed to improve competitive ability.

(2) Step by step, China will enhance the independent ability to develop and spread new products,techniques, materials and energy sources actively to encourage the advancement of techniques, accelerate development of the automotive industry and upgrade automobile products.

(3) High and new technologies will be employed to develop key automobile spare parts, which will gain either a comparative advantages or larger developmental potential. Efforts will be made to enhance the country's ability to develop new products and strengthen the competitive ability to realize the simultaneous development of spare parts with whole vehicles and take part in the international division of labor.

(4) A perfectly functioning modern marketing system and sourcing network will be developed to make use of the resources reasonably and efficiently and to provide the consumer with all-round services.

(5) The country will bring out its comparative advantages and strengthen cooperation with foreign corporations in economy and technique to cultivate its own exceptional products in the automotive industry. Efforts will be made to extend the international market and promote the exporting of China-made automobile products.

2. The automotive industry's main targets

Based on the objectives of the 10th Five-Year Plan from the above-mentioned tasks, China's automotive industry will achieve the following goals by 2005.

(1) Output volume: The annual output of motor vehicles in China will be around 3.20 million, 1.1 million of which will be cars. The industrial added value of motor vehicles in China will total 130 billion yuan (US$15.66 billion), accounting for about 1 percent of the Gross Domestic Product. The domestic need for automobiles will nearly be satisfied. Income from automobile and spare-parts exports will account for 8 percent of the total.

(2) The structural adjustment of corporations: Two to three large automobile corporation groups with a competitive world ability will come into being. The sales and after-sales-services systems of such companies, which reflect international standards, will be established. More than 70 percent of the domestic market share will be held by the corporations and some of their products will be exported. Five to 10 large auto spare-parts corporation groups with a preliminary competitive world ability will also appear and 70 percent of the domestic market share will be held by the top three groups. The corporations' spare-parts export value will account for 20 percent of the total sales value. Three to four motorcycle corporation groups, also with a competitive world ability, will also be established.

(3) The adjustment of product structure: The purpose of the adjustment is to increase the number of cars among allmotor vehicles and heavy and specialized vehicles among the total number of loading vehicles. The amount of diesel-loading vehicles and light-diesel passenger cars will also be boosted, and all mid-sized vehicles will be equipped with diesel engines.

While the production of diesel cars and mini vehicles will be launched, the number of gas-fueled buses and taxis will also be increased. By 2005, the total numberof cars will top 35 percent from 29.2 percent in 2000. The number of diesel vehicles will climb to about 35 percent from 29.7 percent in 2000. Vehicles powered by substitute fuels will account for more than 2 percent of the total. The systematic and modularized ability of spare-parts and increase the number of high-tech spare parts with added value. The export volume of spare parts will also be increased. At the end of the 10th Five-Year Plan, gas vehicles with carburetors will no longer be produced.

(4) The adjustment of technical structure: By the end of the 10th Five-Year Plan, the performance and quality of automobiles and key spare parts will reach the level of similar products in the world. The details are as follows:

i. Product safety will be improved greatly. All new large and mid-sized passenger cars and heavy-duty vehicles will be equipped with an anti-lock braking system (ABS); the number of cars with ABS and airbags will also be boosted. Equipped with features designed to minimize damages in head-on collisions, new cars and mini passenger cars will also be fitted with technology reducing the impact of side collisions.

ii. In non-diesel vehicles, electric, closed-loop fuel-supply systems will be popularized and three-level catalyzed transformation fittings will be introduced;, burning with thin air, changeable gas levels and straight spraying within the cylinder will also be widespread. Diesel vehicles will be equipped with oxygenized catalyzed transformation fittings, and added-pressure techniques, middle cooling and shared diesel-engine rails will also be adopted.

Gas emissions in new cars, light and mini vehicles, large and mid-sized passenger cars and mid- to heavy-duty vehicles will meet Euro II emissions standards, and some mid- to top-grade cars, as well as large and mid-sized top-grade passenger cars will meet Euro III standards. Gas emissions in four-wheel agricultural vehicles will also be gradually improved and equipped with multiple cylinders that meet Euro I standards. Gas emissions standards of various vehicles produced around 2010 will reach the international level.

iii. The utilization coefficient of non-diesel vehicles will be improved. Gas consumption per every 100 miles will also be decreased by an average 10 percent. The reduced consumption levels of cars and light vehicles will range between 5-10 percent and the corresponding figure for mid and heavy vehicles will be 10-15 percent. The number of automobiles powered by a substitute fuel will rise so that auto fuel need and supply in China can be optimized.

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