China's Ministry of Industry and Information Technology (MIIT) is to establish a mechanism to strengthen the country's auto industry and put an end to the present permanent qualification of motor vehicle manufacturing enterprises.

The new policy is expected to help quicken industry's transformation steps, improve the core competitiveness of automakers, and eventually move China's auto industry into a new stage from being "seemingly big" to "genuinely strong", said the MIIT in a news release published on its website.

The authorities will launch a two-year management programme to help manufacturers who fail to manage normal production, according to a notice on establishing exit mechanism for auto industry released by the MIIT.

The MIIT said that the phrase "manufacturers that fail to manage normal production" referred to enterprises with low annual sales for two consecutive years. Specifically, a passenger vehicle maker should sell at least 1,000 units annually, a large and medium-sized bus maker should sell at least 50 units annually, a light bus producer make at least 100 units annually, and the basic annual sales line of mid and heavy-duty truck makers, light-duty truck makers, special transportation vehicle makers, and motorcycle makers should be 50 units, 500 units, 100 units, and 1,000 units respectively.

At present, China’s automotive industry is very weak and fragmented with more than 1,300 businesses engaged in producing all kinds of motor vehicles, including 171 carmakers, 120 motorcycle makers, more than 900 special vehicle makers, and 135 manufacturers of three-wheeled motor vehicles and low-speed motor vehicles.