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Calls for Automakers to Build Brands
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Calls are growing for Chinese automakers to speed up their independent development, instead of being affiliated with foreign auto giants.

"The time is ripe for our country to have an independent auto industry," Vice-Minister of Science and Technology Shang Yong told a government-organized auto forum in Beijing yesterday.

Domestic car manufacturers should seize the opportunities available to enhance development capabilities and foster their own brands, as China is the third biggest and fastest-growing auto market in the world, Shang said.

Total vehicle output in China rose by 12.6 percent year-on-year to 5.7 million units in 2005, including 3.1 million cars.

However, four-fifths of China's car market is controlled by foreign brands as the development capabilities of domestic carmakers is much weaker than its foreign rivals.

"We should resolve to promote independent development and brands," Shang said.

Expecting foreign automakers to transfer core technologies to China, the government allowed them to produce cars domestically two decades ago.

All of the world's major automakers have formed joint ventures with Chinese partners.

However, as a result, Chinese carmakers have failed to obtain core technologies from foreigners, while the latter has dominated the domestic car market.

Mei Yonghong, another official from the Ministry of Science and Technology, pointed out yesterday that forming joint ventures with foreign partners is unlikely to make China's auto industry strong in real terms.

Most of China's carmakers have vowed to develop independent brands.

The First Automotive Works Corp (FAW), the partner of both Volkswagen and Toyota, plans to spend 11.7 billion yuan (US$1.5 billion) in independent development from 2006 to 2010, Wu Shaoming, the company's deputy general manager, told the forum yesterday.

As China's top auto group, FAW aims to increase sales of its own brand vehicles to 1 million units a year by 2010, from 550,000 units last year, Wu said.

The 2010 figure will account for half of the company's overall annual vehicle output by that time.

Beijing Automotive Industry Corp, which has a joint venture with DaimlerChrysler and Hyundai Motors, also plans to invest more than 10 billion yuan (US$1.2 billion) in independent development over the next five years, said Dong Yang, the company's general manager.

Dong said the Beijing auto firm's input in development will grow to 3 percent of its total turnover annually during that period.

(China Daily April 27, 2006)

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