Vice General Manager of China South Industries Group Corporation (CSGC) Yin Jiaxu said that even though the complete size of China’s auto industry is large, it is not substantial and has low concern. He also said that the state must boost policy support in order to encourage auto enterprise mergers and reorganizations and make China a strong auto power.

Last year in October, CSGC and Aviation Industry Corporation of China countersigned an agreement to restructure the Chang’an Automobile (Group) Co., Ltd, evolving into the largest strategic reestablishment in the automotive industry in a group of central stated owned enterprises.

Yin said to reporters that the automotive industry is a great backbone of national economic development. There are many automobile manufacturers, but China do not have a world-class automobile enterprise. China’s biggest automobile company Shanghai Automotive Industry Corporation (Group) boosted its sales to 2.7 million vehicles in 2009, of which a more number are joint venture products assisting with foreign brands, and China’s own brands sold just 1.18 million cars, whereas the world’s second-class automaker Suzuki sold 2.308 million cars in 2009.

Yin Jiaxu believes that China should accelerate the merger and reorganization process to optimize auto industrial structure, and improve the competitive lead. In recent years, China have been advancing and strengthening auto companies’ mergers and acquisitions using the market mechanism, but the actual impact is not noticeable, and progress is slow. There are also needs related to policy support in personnel placement, debt disposal, tax relief, social functions and transfer tax allocation, the selling of assets and integration, and credit.

China’s booming auto market is due to the provision of large living space for auto companies, and the role of market regulation is reserved.

By MND A01