China's auto industry may face excessive capacity, official says

Shanghai. September 10 (Gasgoo.com) - China's automobile output capacity has exceeded 10 million units this year, and it may face serious excessive capacity, a senior Chinese automobile industry official said Sunday.

In recent years, many Chinese automakers are talking about the expansion of their output capacity and many global auto giants are equally enthusiastic about adding new investments in China's auto industry.

"We have worries under this investment enthusiasm," Zhang Guobao, deputy director of National Development and Reform Commission (NDRC) told International Forum on the Development of China's Automobile Industry in Tianjin last Sunday.

Many people in auto business believe China has "a great potential for automobile industry" on the grounds that China has 27 vehicles per thousand populations and the number is 150 for world average.

"It is unscientific to compare China's vehicle ownership per capita to that of world standards," Zhang told the conference. "China is a developing country with a huge population. And the vast majority of our population cannot afford to own a car."

In addition, automobile industry requires a huge investment; once these investments turn out to be a failure, they would lead to billions of losses, Zhang warned.