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Structure adjustment: focus of domestic auto sector
Last Updated(Beijing Time):2009-11-23 11:20
By Zhang Ya

With the 10th million of auto launching off the assembly line, China's auto industry has also entered a new development stage. The output of 10 million sets indicates that China has become a big country in auto production, and the next target is to become an auto power by realizing the transformation from big to power. However, to make such a target come true, China's auto industry does not only have god-given opportunity for development, but also face great challenges.

The overall economic situation improved continually

Since the beginning of this year, in order to answer the impact of international financial crisis, China has launched programs on revitalizing ten industries successively, among which, the auto industry ranks the first.

The significance of auto industry lies in its strong driving force. The auto industry is relevant to more than 150 industries, which can drive electronic, chemical and other industries. What's more, auto glasses, tires and seats can drive glass industry, rubber industry and textile& leather industries respectively.

'Auto industry has promoted the economic development; in reverse, China's economic development has also impacted the development of auto industry." Expressed by Yao Jingyuan, Chief Economist of National Bureau of Statistics of China, on 2009 China Automobile Development Forum held recently.

Since the beginning of this year, although facing the challenge of international financial crisis, China's economic situation has still maintained a good momentum. In the first three quarters, the growth rate of China's GDP has realized 7.7 percent, which has laid a good foundation for living up to the annual target of 8 percent. And the persistently improved macroeconomic situation does not only become one of the important reasons for the rapid growth of China's auto industry in the first nine months, but also a strong support and guarantee for China's auto industry developing from big to powerful in the future.

Second-tier and third-tier markets are gradually opened.

In this March, along with the new record on China's auto sales volume reaching 1.1098 million sets, China's passenger vehicle sales volume has come up to 2.6788 million sets in the first quarter, surpassing the U.S. and becoming the largest auto market in the world.

Later, the figure has been refreshed constantly. An unprecedented flourish has taken on in China's auto market.

'From January to September, the increment aggregated 1.61 million sets in the market. The contribution rate of the first-tier market is about 20 percent, while the second-tier and third-tier markets 80 percent." Xiong Wei, Vice General Manager of Beijing Hyundai Motor Company, believes that there are two impetuses in China's passenger vehicle market this year. One is the mature first-tier market as a major impetus, while the other is the second-and-third-tier market with a larger scale and rapid development. Such two impetuses have formed a soaring sales momentum in 2009.

Beijing Hyundai, whose development was in the bottom two years ago, has realized an explosive growth in sales volume since the beginning of this year. Such a sales performance has also benefited from the successful orientation and grasp to the second-tier and third-tier markets.

Not only the difference between urban and rural areas exists in China's market, so does the difference between Middle-and-West China and East China. For example, some consumers pay attention to outline while some pay attention to performance-price ratio, and it is naturally more possible that such goods with pleasant outline and high performance-price ratio will succeed in the market.'The structure of Beijing Hyundai's products approved that such a difference indeed exist." Xiong Wei expressed,'Just because the products have met the character of diversification in Chinese market, our sales volume has increased."

Statistics from China Association of Automobile Manufacturers(CAAM) shows that in the first nine months of this year, the sales volume of China's passenger vehicle has increased by more than 40 percent year on year, and among the major varieties, the cross passenger vehicle thriving in the second-tier and third-tier markets has ranked first in terms of growth rate, up 72.47 percent year on year. And along with the upgrade of China's consumption structure, the consumption potential in the second-tier and third-tier markets will erupt persistently.

Further trial to the development from big to powerful

Following the increased output and sales volume, what China's auto industry will face is how to make itself from big to powerful, which is an important factor to determine how far and how well China's auto industry can develop. In this August, when talking about the work in the industrial field of the second half year, Li Yizhong, Minister of Ministry of Industry and Information Technology, stressed that the focus of auto industry in the second half year lies in structural adjustment.

The structural adjustment of auto industry covers multiple aspects, including the structural adjustment of traditional auto industry, as well as the adjustment from traditional autos to new energy autos. The former is the most important work in the future three to five years, involving improving industrial concentration degree, promoting enterprises' acquisition and reorganization, reinforcing the construction of self-owned brands, adjusting product structure, etc; viewing from the long-run development of China's auto industry, the most important work is realizing the structural adjustment from traditional autos to new energy autos.

As an important step of structural adjustment, although the development of the autos with self-owned brands has made great progress in recent years, further reinforcement is still needed. China's autos will walk towards outside, towards the world finally, which is also an important embodiment for China's auto industry developing from big to powerful. And to enter the international market firmly, self-owned brands must stand firmly domestically.

On 2009 China Automobile Development Forum, Gu Xianghua, Deputy Secretary General of CAAM, pointed out when talking about the auto export of this year,'Due to the international financial crisis this year, the auto export shows a negative growth, which is certainly resulting from the shrinking of outside market to some extent, however, there are also some problems existing in China's auto industry. We shall conclude experience and practice internal work."

When the auto output has surpassed 10 million sets and the sales volume has also climbed up increasingly, none but the significance of structural adjustment is realized calmly, and the industrial foundation is laid better, can the auto industry be developed soundly in the long run.
Source:CE.cn 
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