One automotive analyst has hailed the actions of the Chinese government in encouraging growth in the vehicle sector.
The car industry is regarded as one of the key 'pillars' established by Beijing, with the authorities' light touch praised by Intelligence Automotive Asia managing director, Ashvin Chotai at last week's Global Automotive Forum in the central Chinese city of Chongqing.
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"It was not until the tenth Five-Year Plan that China encouraged mass motorisation – it was a watershed moment," said Chotai. "It also coincided with China's entry into the World Trade Organisation.
"Bearing in mind this period coincided with the [global economic] crisis, growth nearly tripled, it is mind-boggling. The 12th Five-Year Plan growth rates were more moderate – 6% per year. Since the 11th Five-Year Plan the government has abandoned specific production targets.
"Give credit to the government for guiding the industry rather than setting targets. Indigenous brands, mention of the environment, sustainability and greater support for new electric vehicles and industry consolidation."
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The auto sector could well benefit in the future for China's relaxation of its hitherto strict one-child policy in recognition of an ageing population needing more support from the younger generation.
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By GlobalDataChina is also mulling more financial deregulation, with Chotai highlighting what he referred to as the "internationalisation" of the currency.
"Gradually, China has recognised there are interlinkages to the rest of the world," he said, adding: "The biggest challenge is the macro-economic backdrop here. I worry about the rate at which the debt level is growing. Will it react in the same way as Japan with a decade-long stagnation? I don't think so.
"There is a risk of a hard landing – I don't believe it will happen but we should be aware of that. Car ownership levels are still pretty low and cities are not saturated.
"The new electric vehicles support incentives will continue to 2020. The question is, can the new electric vehicle market continue to grow without government support.
"Five litres [fuel consumption] will be very challenging for domestic makers. What is the outlook for 2020? I would say 6.5% GDP growth is [a] challenge, I think maybe, more 5%.
"Vehicle production, I am expecting to be around 31m [while] vehicle export targets of 3m will be quite [a] challenge. There are too many Chinese brands and there is no single national champion leading the way."
