China issued an eagerly awaited policy document on Tuesday aimed at steering the country’s booming car industry and giving local players a helping hand while consolidating a fragmented sector.
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According to Reuters, the State Development and Reform Commission, the country’s powerful economic planner, said the policy will decree a minimum investment in new car plants of no less than two billion yuan ($US241.7 million).
That effectively bars small-time investors wishing to cash in on a car market that nearly doubled last year to about two million sedans, as Beijing wages war on over-investment in the motor, steel and other sectors, the report added.
It would also make it easier for large companies to win approval for new projects, Reuters noted.
The news agency said that Beijing began circulating a draft last year that stipulated Chinese car makers should control half of the market by 2010 but Tuesday’s final document stopped short of that, because industry executives said it had worried dominant foreign players such as Volkswagen and General Motors.
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By GlobalDataForeign car makers, which have pumped billions of dollars into a market that almost doubled to around two million sedans in 2003, have been the driving force behind the domestic industry, Reuters said.
Industry executives had lobbied hard against that clause – which would have contravened World Trade Organisation commitments by rigging the field against foreigners – and got it removed, motor industry executives told the news agency.
