Chinese automakers aren't ready to compete, industry minister says
China's industry minister said local automakers aren't competitive enough and lack the capability to expand overseas, signaling that the government finds it premature to further liberalize the market.
"We have been playing catch-up in key technologies and lack cutting-edge innovation and technology that can lead in the global auto industry," Miao Wei, minister of industry and information technology, which regulates the auto industry, said Monday at the National People's Congress in Beijing.
Miao's comments came hours after the country's main automotive association released data showing local brands lost market share for a sixth consecutive month in February. Japanese automakers extended their recovery from the anti-Japan protests of 2012, while Ford Motor Co.'s sales rose at their fastest pace in seven months.
"China indeed needs to study how to turn the country into a stronger player in the auto industry from simply being a big one," Miao said. "A superpower can't play catch-up all the time. It needs to lead."
More competition?
The government isn't working on a plan to change the rule limiting foreign ownership of Chinese joint ventures to 50 percent, Miao said, responding to a question about the growing debate about the merits of the rule requiring foreign carmakers to partner with predominantly state-owned companies to manufacture vehicles.
A spokesman for his ministry said last month that China's automakers are still too weak and need to increase collaboration with foreign automakers.
Li Shufu, the billionaire chairman of Zhejiang Geely Holding Group Co., China's first private automaker, said last week that he favors allowing foreign carmakers to control their operations to encourage competition and reduce prices.
A Ministry of Commerce official sparked a debate last year after saying that local automakers should prepare for the day when the foreign stake limit is relaxed. The comments, made during an industry forum discussion, prompted the country's main auto association to say that Chinese brands would be "killed in the cradle" if foreign automakers are allowed to become more independent from their domestic partners.
Big challenges
Wholesale deliveries of cars, multipurpose vehicles and SUVs climbed 18 percent to 1.3 million units in February, the state-backed China Association of Automobile Manufacturers said Monday.
Local Chinese brands accounted for 38.4 percent of sales in February, down 4.6 percentage points from a year earlier, according to the association.
"China's homegrown auto industry is currently facing huge challenges despite being in the early stage of development," Dong Yang, secretary general of the manufacturers association, said at a briefing in Beijing Monday. "Internally, there are also issues such as weak innovation and competitiveness."
Miao's comments came hours after the country's main automotive association released data showing local brands lost market share for a sixth consecutive month in February. Japanese automakers extended their recovery from the anti-Japan protests of 2012, while Ford Motor Co.'s sales rose at their fastest pace in seven months.
"China indeed needs to study how to turn the country into a stronger player in the auto industry from simply being a big one," Miao said. "A superpower can't play catch-up all the time. It needs to lead."
More competition?
The government isn't working on a plan to change the rule limiting foreign ownership of Chinese joint ventures to 50 percent, Miao said, responding to a question about the growing debate about the merits of the rule requiring foreign carmakers to partner with predominantly state-owned companies to manufacture vehicles.
A spokesman for his ministry said last month that China's automakers are still too weak and need to increase collaboration with foreign automakers.
Li Shufu, the billionaire chairman of Zhejiang Geely Holding Group Co., China's first private automaker, said last week that he favors allowing foreign carmakers to control their operations to encourage competition and reduce prices.
A Ministry of Commerce official sparked a debate last year after saying that local automakers should prepare for the day when the foreign stake limit is relaxed. The comments, made during an industry forum discussion, prompted the country's main auto association to say that Chinese brands would be "killed in the cradle" if foreign automakers are allowed to become more independent from their domestic partners.
Big challenges
Wholesale deliveries of cars, multipurpose vehicles and SUVs climbed 18 percent to 1.3 million units in February, the state-backed China Association of Automobile Manufacturers said Monday.
Local Chinese brands accounted for 38.4 percent of sales in February, down 4.6 percentage points from a year earlier, according to the association.
"China's homegrown auto industry is currently facing huge challenges despite being in the early stage of development," Dong Yang, secretary general of the manufacturers association, said at a briefing in Beijing Monday. "Internally, there are also issues such as weak innovation and competitiveness."
