China will push for the strategic restructuring of state-owned automobile enterprises to consolidate the industry, the State-Owned Assets Supervision and Administration Commission said at the China Electric Vehicle 100 Forum.
The SASAC controls three central state-owned automotive firms, namely FAW Group, Dongfeng Motor, and China South Industries Group, the parent company of Changan Automobile.
Dongfeng Automobile, Dongfeng Electronic Technology, and other of Dongfeng Motor's listed units announced on Feb. 9 possible changes to their indirect controlling shareholders. Changan Auto, Dongan Auto Engine, Great Wall Military Industry, Jianshe Industry Group, and other firms under CSGC unveiled on the same day that they had received a notice from the owner about ongoing restructuring plans with other SOEs.
The focus will be on consolidating resources, such as research, development, and manufacturing, as well as market advantages, to accelerate the creation of world-class automotive groups with global competitiveness, said Gou Ping, deputy director of the SASAC. These groups will possess independent core technologies and lead the transformation of intelligent and connected vehicles, he added.
The restructuring will promote internal talent integration, improve resource allocation efficiency, and encourage greater cooperation between central SOEs and other businesses, Guo noted.
This move will help concentrate resources, accelerate innovative breakthroughs, enhance the overall competitiveness and influence of the Chinese automotive sector, and contribute to improving the quality and efficiency of the industry, according to Liu Xingguo, senior researcher at the China Enterprise Confederation.
Addressing Disorderly Competition
Some companies renounce profits to enlarge their market share, which results in disorderly competition in the automotive market as they resort to practices such as false advertisement and malicious smear, said Zheng Bei, deputy director of the National Development and Reform Commission.
These practices not only cause a short-term decline in industry profits but also affect technological innovation, product quality, and safety in the long term, undermining the automotive sector's competitiveness, Zheng added.
The NDRC will adopt systematic measures to address market chaos, regulate illegal practices, ensure fair competition, strengthen price monitoring, guide the industry self-regulation, and expose typical cases of unfair competition, Zheng pointed out. Strict market supervision will also be enforced, particularly to ensure that products meet technical standards and safety requirements.
Automotive companies should shift their competitive focus to improving quality and services and following sustainable development paths from price wars, according to Xin Guobin, vice minister for industry and information technology.
Unlocking Consumption Potential
Sales of consumer goods through the trade-in subsidy policy have exceeded CNY1.3 trillion (USD179.2 billion), with cars accounting for over CNY950 billion (USD131 billion) or 73 percent of the total, according to data disclosed by Sheng Qiuping, vice minister of China’s Ministry of Commerce.
This year, more than 1.77 million applications for the trade-in vehicle subsidy policy had been submitted as of March 28. Over 6.8 million vehicles were traded through this program last year, about four million of which were new energy vehicles.
China's NEV sales surged nearly 36 percent to 12.87 million units last year from the year before. The Chinese NEV market will continue to grow rapidly this year, the MOFCOM said, adding that efforts will be made to remove obstacles related to market flow, further supporting the continued expansion of the industry.
