After a weekend conference, a number of government officials who were present, shared the view that Chinas auto manufacturers should be putting more effort into producing cars which are fuel efficient and more environmentally friendly, instead of focusing on simply making cars in bulk. The officials were interested in seeing some gasoline-electric hybrids and even cars that run completely on electricity.
The officials feel that if the government does not begin leading the country towards the greener practices which are taking over the world, that it will be left behind, and in the process be producing an unrealistic growth of auto sales.
The Chinese director of air pollution control, who works with the Ministry of Environmental Protection, agreed with the stance of the government officials and agreed that if the auto industry in China is to develop, the country must not focus on selling more than before, but rather focus on the quality of the vehicles which are being sold.
The government officials were not clear on how they plan to go about cutting down on auto production and sales, but some growth begun to slow already with the new limits which have been put in place on how many automobiles are permitted to be registered in the capital. Many government incentives also expired at the beginning of the year, which has also affected auto sales.
The incentives in question were meant to subsidize costs for rural areas of the country and also reduce the sales taxes on family vehicles for two years.
The comments made by the government officials seem to indicate that these incentives will not be reinstated for another year and that there will be new regulations which will restrict the permitted number of new cars in other cities throughout the country.
If China does decide to cut down on sales, the rest of the world’s auto manufacturers will be hit hard, particularly because many large companies have just begun to expand throughout China. Some of these auto manufacturers include Nissan, Citroen, General Motors and Ford Motors.
After many years of continuous auto production of all vehicles in China including cars, pickups, sport utility vehicles and minivans, the production has gone up to nearly 17 million cars per year, whereas in the year 2000 the production was at just two million. Auto production in China is currently about twice the amount that it is in the United States and Japan, and much larger than any auto industry in Europe.
The reason for this boom in production was mainly the tax cuts for car sales, which were meant to pull the economy through the economic crisis.
The sales this year have been a lot slower, due to the lack of government incentives, however, it would appear that the government is not thinking of renewing them, but rather go the opposite route and put new limits in place.