China announced detailed policies to stabilize the automotive industry with more stringent policies and supportive policies, aiming at achieving 32.3 million cars sold in 2025. The Ministry of Industry and Information Technology, together with seven government agencies, issued new rules on the issue of disorderly competition and encouragement of stable development in the largest car market in the world.
The government sets conservative sales targets below industry forecasts
According to Business Times, the industry ministry in China is targeting 32.3 million vehicle sales in 2025, which is lower than the 32.9 million vehicles estimated in 2025 by the China Association of Automobile Manufacturers (CAAM). The target became one of the vehicles of a proposal to assist stable development of the auto industry, which the Ministry of Industry and Information Technology of China, and seven other government units came up with on Friday. The new energy vehicle sales goal was pegged at 15.5 million units, increasing by approximately 20 percent, compared to the same time last year.
That is compared to 16 million units projected by CAAM. The plan also proposes the conditional regulation of Level 3 autonomous vehicles and the work to enhance road safety, insurance systems, and associated laws. The strategy will incorporate steps to enhance healthy competition and develop an organised market. On Wednesday, the industry ministry had indicated that it would roll out a three-month crackdown on false marketing and other online offences within the automotive industry.
New energy automobiles are driving market change like never before
China will also increase consumption and enhance regulations to secure stable and quality growth of the automobile sector because it experiences problems such as chaotic competition during high growth, officials have acknowledged at an industry forum recently, according to China Daily Asia. During the International Forum (TEDA) on Chinese Automotive Industry Development at Tianjin in mid-September, Guo Shougang, a representative of the Ministry of Industry and Information Technology, announced that China will ease the tax benefits of new energy vehicles and encourage rural residents to use NEVs.
According to the CAAM, car manufacturing and sales stood at 21.05 million and 21.13 million, respectively, in the first half of 2010 (January -August) with year-on-year growth of 12.7 percent and 12.6 percent, respectively. With sales of 9.62 million units, NEVs, which are the primary growth driver, had a year-on-year growth of 36.7 percent. The proportion of sales of new cars in the form of NEVs (45.5) is much higher than the target of MIIT (which has set the goal of NEVs constituting approximately 20 percent of total new car sales by 2025).
Government subsidies increase consumer adoption in trade-in programs
Geng Hongzhou, who is a member of the Ministry of Commerce, indicated that the MOC will apply reforms in the effort to get rid of restrictive measures that are limiting automobile consumption, move the consumption of automobiles not towards purchases but to consumption, and encourage innovations in automobile consumption. According to Geng, the number of automobile trade-in applications, a policy that enables consumers to swap old cars with new ones with subsidies, hit 8.3 million this year as of Sept 10.
According to Wu Huixiao, CTO of Great Wall Motor, the active period is undoubtedly a serious stage of development of Chinese automakers into the global market. She stated in the forum that instead of just exporting products, globalization would become an ecosystem-oriented global growth that would involve technology, brands, manufacturing, supply chains, and cultural values.
The holistic approach to regulation will respond to short-term needs at the time and will also set the industry on the path of sustainable growth in the long term. As new energy vehicles surpass expectations, and as cars expand internationally in the future, all of these steps will probably make the difference between Chinese car manufacturers making the difficult leap beyond domestic success in the changing world of automobiles and international car industry leadership.