China's Automotive Output Hits 10 Million

China announced on Tuesday that its production of automobiles since the beginning of this year hit 10 million units, making it the third country in the world-together with the United States and Japan-to surpass the annual output mark. Experts hold no doubts about China's capability of sustaining output growth in the future, but say it still needs much time and effort to make the industry more competitive.

Insiders widely believe that China's 10 million car production mark is belated. It could have come last year if the industry had not been affected by the financial crisis.

Jia Xinguang, a researcher at the Automotive Industry Development Research Institute of China, gives reasons behind this year's production hike.

"Purchasing automobiles privately is a new trend. Now China's auto making has turned into a consumer oriented industry, rather than a public and production use oriented one. This is a significant shift and is also part of the government's moves to support our auto industry among its many measures to boost domestic consumption."

The government support package for the sector since the beginning of the year includes halving the purchase tax on cars with engines under 1.6 litres, as well as allocating allowances to farmers to upgrade farm vehicles.

Jia says 10 million is just the starting point for the country's auto industry and its future prospects will be more promising. But at the same time, he warns against possible pressures from the production hike.

"With more automobiles on road, we could face tougher traffic conditions, more energy consumption and a worsening of our environment. So we should seriously consider how to tackle those growing problems of maintaining and growing the auto industry."

Although China has become one of the world's largest auto manufacturing countries, it is still marching towards its goal of becoming a heavyweight player in the world's auto market.

Only five percent of the country's automobiles were exported to other countries last year. In Germany and Japan, the figure is over 40 percent.

Jia Xinguang, the researcher at the Automotive Industry Development Research Institute of China, highlights the Chinese efforts in this regard.

"To forge recognizable and competitive auto brands, to go globally and have considerable global market share, and to stress self-innovation are the only ways to become a heavyweight player in the world's auto market."
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Talking about China's auto industry's future development, Jia says as China is still in its prime stage of the popularization of family cars, the country's auto industry will continue upwards. He also believes that more stimulus policies will come into effect to sustain the industry's growth.