BIZCHINA> Auto Industry in China
Market maneuvers in China's auto industry
(China Daily)
Updated: 2006-11-20 16:20

4. Staccato Mazda3 production

Mazda Motor's joint venture with parent Ford Motor and China's Chang'an Motor started to produce the Mazda3 compact sedan at the end of February this year. The model went on sale on March 11 through Mazda's joint venture with another Chinese automaker First Automotive Works Corp.

As a result of the manufacturing-sale separation which violated China's auto industry policy, production was halted on April 18. According to the policy, any carmaker in China must apply to regulators for approval if it wants to transfer the sales right of its products to other legal entities. To solve the problem, Mazda's venture with Ford and Chang'an will have a stake in the Japanese carmaker's sales venture with First Automotive under a four-party agreement reached earlier this year.

Mazda3 production was resumed on October 30, a Mazda spokesman said, without revealing other details, including when sales would restart and through what channel.

5. SAIC launches own brand

SAIC, the biggest Chinese carmaker, on October 24 launched its first brand car - the Roewe 750 - since 1993. The Roewe, developed by SAIC's technical centres in Shanghai and England, is based on the Rover 75 technology bought from collapsed British carmaker MG Rover.

As the partner of both Volkswagen and General Motors, the company plans to spend more than 10 billion yuan (US$1.26 billion) developing 30 models under its own nameplate from now to 2010. It aims to sell 200,000 of its own brand annually by 2010. SAIC is targeting China's medium-and-upper-end market with the Roewe. SAIC stopped producing its two marques - Shanghai and Phoenix - in 1993. The company now runs joint ventures with Volkswagen and GM to produce cars under the nameplates of the two global giants.

6. Tax cuts on small cars

The government on January 4 issued a notice to encourage the use of environmentally-friendly, low-emission cars. According to the notice, all restrictions on small cars must be lifted before the end of March.

China on April 1 raised consumption taxes on cars and sport utility vehicles with engine capacity larger than 2 litres to 9-20 per cent from 8 per cent. However, charges on vehicles with engine capacity between 1 and 1.5 litres was cut to 3 per cent from 5 per cent.

The two moves are to curb people in the oil-hungry nation from buying gasoline-guzzling vehicles to save energy and improve the environment. In China, auto consumption taxes are imposed on manufacturers instead of buyers. According to industry data,


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