Now that China has become the world’s largest car market, Chinese government officials pursuing quality instead of quantity to make the next great leap forward.
Keith Bradsher of the New York Times writes:
A succession of government officials at a weekend conference called for China’s automakers to shift their focus from making ever more cars and toward producing more fuel-efficient and more advanced models, including gasoline-electric hybrids and all-electric cars.
“The government must take the leading role in controlling unrealistic growth” of the auto industry, Jiang Kejun, the influential director of the Energy Research Institute at the National Development and Reform Commission, China’s top economic planning agency, said Sunday during a speech at the conference.
Li Shize, the director of pollution control at the Ministry of Environmental Protection, echoed Mr. Jiang, saying that “for the auto industry to develop, we should not try to sell more, but to improve the units sold.”
The government officials did not say how they would restrict growth. But growth has already slowed partly because of limits on the number of new cars that can be registered each month in Beijing, and mostly because government incentives expired at the start of this year. Those incentives were subsidies for rural buyers and a two-year reduction in the sales tax on new family vehicles.
While the slowdown may come as a shock to the world’s leading automakers, all of whom have come to depend on China for growth, Chinese automakers themselves are raring to go overseas. Yet:
The government has prohibited Chinese automakers from making big jumps into the American market and severely restricted their entry into the European market. They have also demanded that automakers increase vehicle quality considerably, and have suggested that high-volume exports may not be allowed to start until 2015 or so.
The goal has been to make sure that when large-scale exports begin, Chinese cars do not initially acquire the same reputation for shoddy quality that bedeviled the South Korean industry when it entered the American market and that took many years and offers of long, costly warranties to overcome.