SHANGHAI, China (AP) _ China’s auto output and sales are forecast to reach nine million units in 2007, media reports said, sparking fears that capacity may outpace the market.
A top economic planner said production capacity in the auto sector has now exceeded 10 million units _ well above reported sales of 7.2 million in 2006, which made it the world’s second largest auto market last year, surpassing Japan.
Output in 2006 was 7.3 million units.
The output and sales forecast is higher than earlier estimates of 8.5 million in sales and output, the state-run newspaper China Daily reported Sunday, citing Zhang Xiaoyu, vice president of the China Machinery Industry Federation.
Amid rising profits and fast growth, China’s auto industry is wrestling with an underdeveloped auto parts industry and poor service, said Zhang Guobao, a vice-minister of the National Development and Reform Commission, at a conference in the northeastern city of Tianjin, the official Xinhua News Agency reported.
China is the world’s fastest-growing major auto market, with average annual growth of 26 per cent 2001-2006. In the first half of 2007, output rose 22 per cent over the same period the year before to 4.5 million vehicles. Sales for the period rose 23 per cent to 4.4 million.
But soaring investment has reinforced worries over excess capacity.
In January-June, investment in auto plants and equipment hit US$10.5 billion, compared with about $20 billion for all of 2006, the Xinhua report said.
autonews24h.com
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