China is set to introduce new standardised rules for companies applying to start a car-making business in the country, in what looks like a bid to limit new entrants as sales begin to slow in the world’s number one automotive market.
According to reports, the rules – which are aimed at advancing industry reorganisation – state that these companies must meet certain criteria, including scale of production and development capacity, though no specific figures were mentioned. The country’s Ministry of Industry and Information Technology said on a statement on its website that the rules will take effect from January 1.
There are already more than 100 automaking companies in China, but that hasn’t stopped new players from attempting to get into the game – companies such as Pang Da Automobile, an auto dealer group, for example, have tried to expand into car production.
The reports add that auto sales growth in China will probably slow to less than 5% in 2011 after surging 46% and 32% respectively in the last two years, since the government has phased out purchase incentives, according to the China Association of Automobile Manufacturers.
Nonetheless, the combined sales targets of China’s largest automakers may exceed total demand by as much as 32% by 2015, with companies continuing to add capacity by investing in new plants, according to Bloomberg-compiled data.
In related news, other reports say that China is expected to begin an incremental push toward stricter auto emissions standards starting from next year and is also set to adopt fuel efficiency guidelines on par with those in industrialised countries by as early as 2015.
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