China’s auto industry is regionally based and highly fragmented. That fragmentation has long been considered a drag on the country’s efforts to attain international levels of competitiveness.
According to state media, China hopes to cut the number of its major auto makers from 14 to 10 and increase the market share of domestic-brand vehicles in a consolidation push designed to enhance competitiveness.
The plan, which is part of a larger auto industry stimulus package announced earlier, seeks to create two to three powerhouse automakers with annual sales and production capacity of two million units and another four to five car companies with the ability to sell one million vehicles every year, officials from the China Association of Automobile Manufacturers told Shanghai Daily.
A report in the Shanghai Securities Journal also said that China has chosen four automotive groups to lead mergers and compete to become large-scale producers. The report said the four groups are SAIC, FAW, Dongfeng and Changan.
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Analysts note that Beijing has devised plans for auto industry consolidation before but they have not progressed very far.
