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China's auto industry moves into top gear

2010-11-17 15:58

Editor's note: As Chinese automakers are keen to develop their brands and expand overseas, Dong Yang, secretary-general of China Association of Automobile Manufacturers, shares his views.

Q: In your opinion, is it right for the Chinese automobile industry to "trade (China's) market with (foreign) technology" over the past 30 years?

A: I cannot agree with the notion of trading market with technology. The development of China's automobile industry follows the policy of reform and opening-up. We cannot simply say other industries need not trade market with technology, and automobile industry failed to do so.

The success of Chinese automobiles can be elaborated in three aspects. First, we solved the problems of technology, funding and products after adopting the reform and opening-up policies. In 1984, the number of imported automobiles in China was tens of times as Chinese automobiles. But Chinese companies make 90 percent of cars in China now.

Second, we established a world-class automobile industrial system, and mastered the modern technology applied in automobile manufacturing. Though the development of technology is not that smooth, we still strive for the best. The research and development of Chinese-branded automobiles was started during the 11th Five-Year Plan (2006-2010), and will be in full swing in the 12th Five-Year Plan (2011-2015).

Third, we maintain the coexistence of State-owned, private and foreign sectors, among which State-owned share quite a lot. From this point, the automobile industry feeds more people.

Meanwhile, we have become the largest automobile production and marketing country in the world. The dominance of foreign automobiles in Chinese market has been brought to an end. Sales of Chinese automobiles are 20 percent of the world market.

Q: Among the "20 percent", how many Chinese-branded automobiles did companies in China make?

A: In commercial vehicles, more than 90 percent are Chinese brands. In cars, the market share has been raised from zero to 30 percent. Some of the cars were made by Chinese companies but labeled as foreign brands.

Q: How do you view the phenomena that some joint venture brands plan to develop independent brands?

A: This is a positive change and can elucidate two aspects of the Chinese automobile industry. First, companies cannot count on foreign brands entirely because it cannot fully satisfy the demand. Second, consumers no longer want just foreign cars and are accepting the development of joint ventures in China.

Q: Which companies do you think can make breakthroughs on core technology?

A: Companies such as Chery, Geely, Great Wall, FAW, Dongfeng and Shanghai Automotive all have made breakthroughs. But I think Chinese brands are still like children while foreign brands are like adults. You can say that an adult is more powerful than a child, but will it be so in the future?

Q: Exports, dominated by second- and third-tier Chinese brands, are facing problems of policy barriers and being uncompetitive. Are exports of Chinese automobiles in trouble?

A: Trade protectionism is increasing around the world and cases related to Chinese automobiles are increasing. But in general, these cases are not beyond normal trade frictions. I think companies should have long-term and comprehensive export strategies.

Q: Do you think it is time for Chinese automobile companies to enter international market?

A: Yes, given the fact that China has become the largest production and marketing country in the world. But this doesn't mean we should be in a hurry to succeed.

Q: Some say it is wrong for China to "overtake on a bend" by trying to develop automobiles powered by new energy. Do you agree?

A: I agree. In new energy for automobiles, there are gaps in research, industrialization of new technology and improvements of the industrial chain between China and other countries. Without the solid foundation of traditional automobile technology, the development of electric automobiles cannot go well.

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