CADA recommends restructuring of Chinese automobile manufacturers

At this year's government report, Chinese State Council Premier Wen Jiabao once again brought up the issue of restructuring the automobile industry, placing it relatively high on his list of priorities. China Automobile Dealers Association Deputy Secretary General Luo Lei also voiced his support for restructuring.

"Currently, the number of Chinese manufacturers is fairly high, [while] their scale is not large," Mr. Luo noted. "By undergoing merging [and] restructuring resources can be efficiently integrated." Mr. Luo believes that this will also help get rid of the unnecessary waste caused by competition, helping further develop the market.

China currently has over 140 automobile manufacturers active in the country. Worth noting is that the ten largest of these account for 87 percent of all sales. Numerous manufacturers can't even manage annual sales of over 10,000 vehicles.

According to 2009's Plan on Adjusting and Revitalizing the Auto Industry, successful restructuring will lead to formation of two to three manufacturers with annual sales of over two million and four to five with sales of over one million. The 14 manufacturers which account for over 90 percent of all automobile sales would be reduced to ten or less.

Statistics from the China Association of Automobile Manufacturers confirm that there were four manufacturers in 2011 with sales of over two million: SAIC, Dongfeng, FAW and Changan.