China to spend $1.47bln in auto tech innovation

Shanghai, February 27 (Gasgoo.com) In its recent auto industry boost plan, the Chinese government said that it would earmark 10 billion yuan ($1.47 billion) for supporting carmakers' technological innovations and upgrades, new energy vehicles and related auto-parts development, xinhuanet.com reported today.

China plans to build up a "Big 10" group of globally competitive automakers, led by SAIC (Shanghai Automotive Industrial Corp.), Chinese partner of General Motors Corp. The plan dovetails with the country's long-term strategy of consolidating numerous small regional manufacturers into bigger national auto groups, while encouraging use of more fuel efficient, lower-polluting vehicles.

The central government has pledged to earmark 10 billion yuan for supporting the technical upgrades and innovation of new automakers, especially those who will produce new-energy vehicles and related auto parts. The 1.5L-minus DI gasoline engine, 3L-minus 45kw diesel engine, double-clutch gearbox, and other components for the energy-efficient vehicles are listed among the key products in the support plan.

Foreign-brand cars still dominate the Chinese market after global automakers have been invited to partner with local companies, such as SAIC. General Motors, Volkswagen AG, Hyundai Motor and Toyota Motor have invested billions of dollars in Chinese joint ventures, sharing technology and know-how in exchange for access to the country's potentially huge market.

But the final goal of China's auto industry has always been for the country to have its own auto-making technologies and develop its own brand vehicles. One aim of the new plan is to boost the share of domestic brand auto manufacturers to at least 40% from the current 34%.

China aims to nurture several automakers capable of making more than 2 million cars a year. They would include SAIC, FAW Group, Dongfeng Motor and Changan Auto. The second-tier automakers, with output capacity of 1 million cars or more, may include Beijing Auto, Guangzhou Auto and Chery Auto, among others.