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Govt departments purchasing more locally made cars

By Yu Ran in Shanghai | China Daily | Updated: 2013-03-21 07:33

Govt departments purchasing more locally made cars

A Red Flag H7 hybrid car at an electric-vehicle show in Beijing. Shares of FAW Car Co Ltd rose 10.03% on Wednesday to the daily limit margin on news that many government departments have placed orders for its Red Flag sedans. [Photo/China Daily]

Government departments across the country are buying locally manufactured cars in greater numbers in accordance with the latest government guidelines, carmakers said.

Reacting to the government's call for frugality, and in an effort to boost the fortunes of local car manufacturers, the Ministry of Industry and Information Technology published a draft catalogue last year of 400 types of cars available for official use.

All the cars are either Chinese brands, or internationally branded cars that were manufactured in partnership with Chinese companies in the country - but some previously popular official car brands were omitted, such as Audi, Volkswagen and Toyota.

Domestic carmakers, including China FAW Group Corp, SAIC Motor Corp and Guangzhou Automobile Group Co Ltd, were highlighted on the list as producing high-quality cars that can meet the demands of government departments.

According to Xu Xianping, general manger of China FAW Group Corp, government buying has increased as a result.

"Thirteen Red Flag H7 premium sedans manufactured by our group were purchased by the Jilin provincial government at the end of February, while more than 10 provinces and central government departments have purchased large batches of Red Flag H7 cars," Xu told Xinhua News Agency.

Cui Dayong, deputy manager of FAW Car Co Ltd, a subsidiary of FAW Group, who is in charge of selling Red Flag, Besturn and Mazda cars, said: "The launch of the Besturn B90 in 2012, targeted at the government car market, has received positive results.

"Seventy-two Besturn B90s were purchased by the Fujian provincial government last year."

The share prices of China's car manufacturers have also benefited from the policy. Shares in FAW rose by the 10 percent daily limit in Shenzhen trading on Wednesday, and were poised to hit their highest point since Nov 2008.

And there have been other notable orders received by local carmakers.

The Trumpchi, produced by Guangzhou Automobile Group, is now being used as the official car by the governments of Guangzhou and Fuzhou, while the Roewe 950, produced by SAIC Motor, is reported to have picked up orders from officials in Zhejiang, Jiangsu and Shandong provinces.

Yang Yan, the legal representative of the Wenzhou Transportation Group, appointed to supply rental services for government officials in the city, said: "More than 200 cars made available by the company for government departments to rent were all made by Chinese manufacturers, including models from SAIC Motor."

Buying local brands as official government cars is a common practice in many countries, said Zeng Zhiling, director of Asia Pacific Forecasting with LMC Automotive.

"It is a good method of promoting domestic brands, and increasing the confidence of buyers in local products," said Zeng.

However, Feng Shiming, an auto analyst at Menutor Consulting, said more needs to be done by the government to open up the official car market to more successful small and medium-sized, and privately owned car manufacturers, as well as State-owned manufacturers.

"To promote domestic brands, the government could offer more opportunities for private carmakers, like Geely, BYD and Great Wall to supply government cars," Feng said.

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