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Detailed auto stimulus plan released

(Xinhua)
Updated: 2009-03-21 20:37

China aims for 10 million units in both vehicle production and sales this year, according to an online government document concerning detailed automobile support package.

China's automobile industry is to yield an average 10 percent growth for its production and sales in the next three years, said the document, released on Friday.

The stimulus package was unveiled by the State Council, the Cabinet, on Jan 14, but the detailed plan was not released by the government until March 20.

Related readings:  Auto sales up 25% in February  China details auto stimulus plan for rural residents  China aims to cut auto groups to 10 from 14

The auto support package was among nine others for the country's 10 industry initiatives by the government since January in a bid to cope with the downturn in the short-term, and upgrade its industrial structure for the long term.

In a three-year development plan, the document said by 2011, passenger cars with an engine displacement below 1.5 liters would take 40 percent of the market, and those below 1 liter would have a 15 percent share.

Analysts say smaller-engine cars use less oil and are more environmentally-friendly. They are also cheaper compared with big-engine, gas-guzzling cars.

China would also form two to three auto giants with capacities reaching 2 million in vehicle production and sales, and four to five smaller companies with capacities greater than 1 million in the next three years through mergers and acquisitions, according to the document.

Another government paper concerning stimulus support for the steel sector was also released Friday. It said China would set up several steel giants, with the top five producing 45 percent of the steel by 2011.

Excessive capacity and low industrial concentration have long plagued China's steel sector.

Based on 2007 figures from the China Jianyin Investment Securities, the top five Chinese steel companies produced only about 20 percent of the country's steel.

The steel support plans would strive to eliminate respectively 72 million and 25 million tons of obsolete iron and steel production capacities by 2011.