China's auto makers target third-tier cities

2008-12-17


After auto sales tumbled in the third quarter in first- and second-tier cities, a survey by Sinotrust, a Beijing-based marketing research and consulting company, suggests that it is time for China-based auto makers to target the smaller third-tier cities.

Third-tier cities saw their auto sales rise 12 percent in the third quarter, showing a high growth potential, while the market situation "will continue to deteriorate in the first- and second-tier cities as a result of the financial crisis," Lang Xuehong, a Sinotrust executive, said to the Chinese language Economic Observer.

Growth potential is also high, Lang said, in cities in China's central and western regions – evidenced by a 24 percent increase in car sales in those regions in the first 11 months of 2008, much higher than the 7.3 percent national average, according to National Passenger Cars Association of China.

Purchasing power of smaller cities can be further strengthened as the central government's 4 trillion yuan ($586 billion) stimulus package boosts agricultural business, industry observers said.

http://www.chinadaily.com.cn/bizchina/2008-12/17/content_7315559.htm

China mulls bailout of homegrown auto makers

2008-12-17

China is to propose its own bailout plan for the auto industry, according to the Beijing-based Chinese language Business Journal, citing an industry expert.

The bailout plan was initiated by the Ministry of Industry and Information Technology in November 2008.

The plan reportedly contains six policy recommendations including jacking up domestic demand, expanding overseas markets, supporting homegrown brands, reforming fuel tax, boosting the second-hand vehicle market, and preventing policies and regulations that may hurt auto sales.

http://www.chinadaily.com.cn/bizchina/2008-12/17/content_7315516.htm

http://www.chinacarforums.com/forum/showthread.php?t=4570

http://www.chinacarforums.com/forum/showthread.php?t=5401

http://www.chinacarforums.com/forum/showthread.php?t=4525

http://www.chinacarforums.com/forum/showthread.php?t=4246

China's 1st multi-functional road detector car debuts

2008-12-16

http://news.xinhuanet.com/english/2008-12/16/xin_3021205162154796065666.jpg
Photo taken on Dec. 11 shows the exterior of a multi-functional road detector car. China's first multi-functional road detector car with its own intellectual property rights comes out recently, which cost Chinese scientists eight years to tackle technological difficulties

http://news.xinhuanet.com/english/2008-12/16/xin_3021205162154937505667.jpg
A technician demonstrates how the multi-functional road detector car works on Dec. 11, 2008

http://news.xinhuanet.com/english/2008-12/16/xin_31212051621540622074768.jpg

http://news.xinhuanet.com/english/2008-12/16/content_10514913_2.htm

Can someone here shed some light on this type of car

road detector car.

China to boost car sales by scrap incentives

2008-12-26

BEIJING -- China plans to stimulate sales of new cars by offering incentives for people to scrap their old cars, an official with Ministry of Commerce said Friday.

He said the ministry would give car owners subsidies to scrap old cars and buy new ones in a bid to revive the country's new car market, which had seen a 3.8-percent sales decline in November.

"Details of the plan will be announced very soon," he added.

In Shanghai, a similar plan has already worked. New car sales were up more than 10 percent at a local Volkswagen retailer, which began offering car scrap bonuses of 3,000 yuan (428.6 US dollars) a month earlier.

The ministry's plan is among a stream of moves to bail out the country's auto industry. Other planned measures include car purchase tax cuts and improved credit services for car transactions.

It is important to keep new car sales growing as the auto industry plays a crucial role in the country's economy, analysts said.

During the past 11 months, profits of the country's industrial companies, including auto manufacturers, increased only 4.9 percent, a record slow growth, according to the statistics bureau.

Premier Wen Jiabao said "the auto industry's current difficulties are what concern me the most," in a recent inspection trip to southwestern Chongqing, a city where the auto industry weighs heavily on local economy.

"Reviving the auto industry will be helpful to spur domestic demand because a one-yuan-increase in this sector's output means 2.64 yuan in others on the industry chain," said Zhang Boshun with the China Association of Automobile Manufacturers.

In China, auto-related industries totaled 156, according to statistics available. Among them are steel and petrochemical companies with huge numbers of employees.

But some experts said the plan was unlikely to change the situation because most Chinese car owners bought their cars within the past six years and they might not need new cars.

With a tighter budget, private companies might not be able to afford new cars, a salesman said.

Globally, the ailing Big Three are still on the verge of bankruptcy, Toyota Motor, the Japanese auto giant, announced on Monday it expected the first loss in 70 years.

http://www.chinadaily.com.cn/china/2008-12/26/content_7345870.htm

Trade body suggests easing auto credit policy

2008-12-29

China should ease its auto credit policy and convert part of its idle housing funds to finance car purchases, a move which could boost the sluggish auto market, an industry association suggested on Dec 25.

The average interest rate of an auto loan is 1.4 times the basic rate, and twice that of a housing loan, which is the main factor impeding auto consumption credit business, the National Passenger Car Information Exchange Association said.

About 16 percent of car buyers purchased their cars on credit in 2004, but the figure tumbled to eight percent in 2008, compared to the average 70 percent worldwide, according to the association.

A looser auto credit policy similar to the favorable housing credit policy should shore up auto consumption on credit to 13 percent, and push up a four percent increase in auto sales in 2009, according to the association.

China's auto industry would shrug off the current doldrums should the ratio reach 20 to 30 percent, Jia Xinguang, chief analyst of China National Automotive Industry Consulting & Developing Corp, told the Oriental Morning Post.

The State Council, or China's Cabinet, said in early December that the government would take measures to support auto consumption credit businesses, and extend auto financing companies' financing channels.

The association suggested converting the idle part of the housing fund, now amounting to 400 billion yuan ($58.39 billion), into a housing and auto consumption fund to finance individual house and car purchases.


http://www.chinadaily.com.cn/bizchina/2008-12/29/content_7350923.htm

China to launch auto industry rescue package soon

December 31, 2008

Shanghai, December 31 (Gasgoo.com) China's top economic planning agency has completed the layout of a stimulus package to save the automotive industry and will implement the plan soon after the cabinet approves it, a report by sina.com said Wednesday.

The report cited exclusive sources familiar with the details as saying the package, worked out by the National Development and Reform Commission, is a full-fledged one with major measures, including cuts in car purchase tax and consumption tax, funds to support fuel efficient vehicles and new-energy vehicles, and incentives for car owners to scrap their old models in favor of new ones.

Other steps such as facilitating mergers in the sector, encouraging banks to provide low-interest loans to automakers and government bodies to purchase more Chinese-brand cars are also included in the package, the report said.

An industry analyst said the report that the implementation of the stimulus package will help to improve consumer confidence amid the economic slowdown and China's auto market is expected to see higher growth rate in the next few years.

http://www.gasgoo.com/auto-news/1008910/China-to-launch-auto-industry-rescue-package-soon.html

China hikes leaded gasoline import tax fivefold

December 31, 2008
China will increase fuel consumption tax on leaded gasoline imports fivefold to 1.4 yuan per litre from Jan.1, the Finance Ministry said on Tuesday, effectively discouraging imports of more polluting motor fuel.

The ministry also raised the tax on other imported fuels in line with taxes on domestically produced fuels. But its tax rates on domestically produced fuels, published on Dec. 19, had not given separate rates for leaded and unleaded gasoline.

Under those rates, all domestic gasoline will be subject to a consumption tax of 1.0 yuan per litre.

http://www.gasgoo.com/auto-news/1008907/China-hikes-leaded-gasoline-import-tax-fivefold.html

China has imported 4.05 million vehicles since the country launched its reform and opening-up policy in 1978, xinhuanet.com said yesterday, citing a commerce ministry official.

The 30 years of reform and opening-up helped China make its greater economic achievements and expand the imports of vehicles. The emerging country saw its imported vehicles increase to 400,000 units of 2008 from 25,000 units in 1978, an average annual growth of 9.6%.

The official said the Chinese government has cut the imported vehicles tax rate for 19 times since 1992, with the average tax rate down from 129% to the current 18.8%. The tax rate of passenger cars dropped to 25% from 180%-220% in 1992. Meanwhile, lots of non-tariff measures have been eliminated.

China's imported-vehicle market has become one of the most open-end ones around the globe, surpassing Japan to be the Asia's largest market in this sector.

Since China joined the WTO at the end of 2001, its domestic auto industry has developed rapidly, while the share of imported vehicles has slid continually, down to 5% in the market in 2002-2008 from the record 44.5% in 1985.


http://www.gasgoo.com/auto-news/1008975/China-has-imported-4-05-mln-vehicles-since-1978.html

Hi, I need some assistance to identified which of the China Car manufacturer fits the description below.

"A large car manufacturer with its headquarters and production facility
located in China and has assembly plants in China, Australia, America and
Scotland. They produce five models of car: a small compact vehicle, a medium sized saloon, a large saloon, a multi-purpose vehicle and a large Off Road 4x4/SUV. Has been in existence for more than 35 years"

Thanks in advance.

Can someone here shed some light on this type of car

road detector car.

Well mememe we already know by the photo that the road is there, so it needn't be detected. But this "daolu jiance" (道路检测) vehicle appears to function for gauging or surveying the road. So a road surveying vehicle might be a more precise term for it.
Perhaps someone else here can tell the story better than Xinhua has.

China to launch auto rescue plan this week

January 12, 2009

Shanghai, January 12 (Gasgoo.com) China's top economic planner National Development and Reform Commission may roll out the long expected automotive industry rescue package on within this week, an insider participating in the policy making process said on Sunday, according to the Beijing News.

The unnamed source explained that major measures of the plan have already been defined, and there's only a few small details left for further consultation.

The aim of the plan is to ensure an annual sales growth of some 12 percent for the next three years in the auto sector, the source said. Related stimulus packages for other industries are expected to follow up soon.

Measures in the auto industry rescue package were reported to include cuts of 10 percent vehicle purchase tax to boost consumption, direct government funding to support fuel efficient vehicles and new-energy vehicles, and incentives for car owners to scrap their old models in favor of new ones.

In 2008, retail sales of passenger vehicles in China, excluding exports, rose 7.4 pct to 6.43 million units, a significant fall from the double-digit growth rates seen in recent years, as the global recession stunted demand.

http://www.gasgoo.com/auto-news/1009029/China-to-launch-auto-rescue-plan-this-week.html

China's auto industry gets a shot in the arm

Sales tax on vehicles with engines of less than 1.6 liters will be halved and exchange of old vehicles for new ones with smaller engines subsidized to boost the auto industry.

A total of 5 billion yuan ($731.45 million) will be set aside for the subsidy to be given to farmers. And sales tax will be cut from 10 percent to 5 percent from Jan 20.

The stimulus package for the country's auto industry, the third largest in the world, was announced by the State Council Wednesday after its sales growth fell to a 10-year-low of 6.7 percent last year.

The package is expected to boost the steel industry and designed to promote fuel-efficient and low-emission vehicles, too.

"In order to adjust and revive the auto sector, we must implement a proactive consumption policy to stabilize and boost auto demand," the State Council said.

"Any unreasonable rules" hampering auto sales would be removed in order to spur demand.

The government said it would support the alternative-energy vehicle sector by promoting the mass production of electric-powered cars in big and medium cities.

In the next three years, the government will provide 10 billion yuan ($1.5 billion) to automakers to help upgrade their technology and develop alternative energy vehicles.

The move, likely to benefit more than 80 auto- and steel-related firms in Shanghai and Shenzhen, is part of a series of industry specific policies to stimulate the economy.

The government is expected to release supportive polices for eight other industries, including shipbuilding, petrochemicals and textiles, in the next few days.

Analysts said the package announced Wednesday would help the two pillars of the national economy immensely. "The wide-ranging supportive measures will certainly give the auto industry a shot in the arm," said Jia Xinguang, a Beijing-based auto analyst.

"But it's hard to say how big an impact it would have in the short term", he said.

About 9.38 million vehicles were sold in the country last year against a target of 10 million.

The slump in demand saw the combined January-November profit of the country's 19 biggest automakers fall 0.5 percent year-on-year to 65.6 billion yuan, China Association of Automobile Manufacturers (CAAM) said on Monday.

A quarter of the 45 carmakers tracked by the association failed to reach even half of their annual sales targets, CAAM said.

http://www.chinadaily.com.cn/bizchina/2009-01/15/content_7398722.htm

Central bank gives a lift to car

2009-01-16

People's Bank of China, the central bank, said today that it would support the establishment of more auto financing companies and the expansion of their business scope to help boost vehicle consumption.

In a statement, the central bank also said it would encourage commercial banks and auto financing firms to "gradually develop" the auto credit business in China.

"The central bank will support the issuing of new auto financing company licences if necessary," the bank said.

The bank said it would encourage the development a "long-term and stable financing" structure for the automobile industry.

Auto loans of all financial institutions nationwide amounted to 158.3 billion yuan ($23.14 billion) in 2008, the central bank said in the statement.

The State Council, China's Cabinet, on Jan 14 approved a stimulus package for auto industry after car sales growth slowed to 6.7 percent in 2008, the lowest level in the past 10 years.

http://www.chinadaily.com.cn/bizchina/2009-01/16/content_7405257.htm

China's auto industry takes two roads to 'indigenousness'
2009-1-22

HAVING an indigenous automobile manufacturing sector has long been an important trademark of the government's industrial policy.

This sector can be classified into two camps: a group of home-grown greenfield companies represented by Chery and Geely on one side, and the indigenous offshoots of joint-ventures with major foreign auto makers, represented by SAIC and FAW on the other.

The competition in-between doesn't just stop at the marketplace - the rivalry between the two business models and the technology development approaches to achieving indigenous "ness" also has been the centerpiece of the ongoing debate over China's auto industrial policy.

For some time, the first camp has seemed to enjoy an upper hand, as Chery and Geely had all experienced spectacular growth for the years before 2007. In recent years however, both companies' sales plummeted, plagued by quality and brand-image problems.

Such phenomenon is not unprecedented. Hyundai, a South Korean auto maker, entered the US market in 1986 with a single model, the Hyundai Excel. With a price tag less than US$5,000, a couple of hundred bucks cheaper than the cheapest car available at that time, Hyundai set a record of selling 126,000 units.

But soon poor quality and reliability problems started to take their toll. Three initial years of spectacular growth was followed by a prolonged period of sluggish sales.

In response, Hyundai invested heavily in quality. It added a 10-year or 100,000-mile powertrain warranty.

By 2004, sales started to turn around dramatically. Its quality and reputation have also improved greatly. However, it has taken the Hyundai brand a long time to recover from its initial tarnished image.

Today, even after 20 years, Hyundai cars are still priced at the low end of the market, even though some of its models have exceeded Honda, standing at the top of J.D. Power's initial quality ranking list.

SAIC adopted a different model. With strong cash-flow backings from its successful JV operations with GM and Volkswagen, it simply bought its way to "indigenousness."

My rough calculation is that SAIC in total has spent somewhere between 1.5 billion to 2 billion yuan (US$219 million-US$292 million) to develop a complete line of auto technologies and products..

Granted, much of it is actually bought from Europe. But SAIC actually owns it.

Aside from the debate about indigenous technology development, the more important thing is the brand.

As they say in real estate that it's all about location, location and location, the auto industry seems to be all about brand, brand, and brand.

SAIC's MG and Rowe lines see moderate sales growth, but they generally enjoy good reputations and are priced with brand premiums. Rowe 750 is the only indigenous car selling over 200,000 yuan.

Granted, 1.5 billion to 2 billion is a lot of money. But Chery and Geelys' route to indigenousness is not cheap either. Geely spent over 200 million yuan to develop a 1.8 liter engine alone. Chery spent annually 10 percent of its revenue on R&D. Both companies also relied on foreign resources for some of its technology development.

Chery and Geely recently invested heavily in improving product quality. But if the Hyundai's North American experience serves as a lesson, the brand image problem may take many years to recover.

In the end, the debate about the right industrial policy of achieving indigenousness is moot in my opinion. If I were asked which is a more successful business model, I would say, "show me the money."

In an era of global sourcing and integration, whether some parts in a car are developed in China or not doesn't matter.

http://www.shanghaidaily.com/sp/article/2009/200901/20090122/article_388858.htm

China rolling out "Cars to Countryside" program

February 19, 2009

Shanghai, February 19 (Gasgoo.com) Detailed rules on China's "Cars to the Countryside" scheme will be publicized this week, reported the Beijing Times today.

The newspaper said the program has already approved by the Ministry of Finance last Friday and will formally go into operation as of March 1.

Under the scheme, farmers in rural areas who trade up to lightweight vans or purchase minibuses with engines size of 1.3 L or less would get up to 10% subsidies of the full price of a complete vehicle.

In addition, farmers will also be offered a tax cut for every smaller vehicle they purchase. Analysts estimate that farmers will benefit from the tax cut with a saving of about 5,000 yuan ($735) on each minibus.

The government will grant 5 billion yuan in total for the program. Domestic light truck makers including Beiqi Foton Motor Co, Anhui Jianghuai Automobile Co, Dongfeng Motor and major minibus maker such as Chongqing Changan Automobile Co, SAIC-GM-Wuling, and Lifan Motor are expected to be the biggest beneficiary of the scheme.

http://www.gasgoo.com/auto-news/1009399/China-rolling-out-Cars-to-Countryside-program.html

China aims to merge carmaking groups to 10

February 24, 2009

Shanghai, February 24 (Gasgoo.com) Earlier this month, the Chinese government issued its detailed plan to consolidate the auto sector, including decisions to merge the country's major auto-making groups to 10 from 14, and to subsidize rural buyers of new vehicles, China Securities Journal reported on Tuesday.

The auto industry "boost plan," released by the State Council, China's cabinet, on Feb. 11., has detailed the guidelines on lifting the auto market demand, subsidizing the trade-in of old vehicles with new ones, scrapping road tolls, government's buying more Chinese-brand cars, standardizing auto financing and loans, normalizing the used-car market, expanding urban transportation systems, speeding up mergers of auto-making groups, supporting auto R&D efforts, and others.

The detailed plan appreciably supports the mergers and acquisitions by large auto-making groups, saying that the current 14 Chinese carmakers, which have 90% market share together, will be reduced to 10 or less through mergers.



The government wants to see two or three big Chinese groups with annual production each exceeding 2 million vehicles, plus four or five groups making over 1 million vehicles. Such consolidation would help automakers develop new products while cutting costs. A merger in early 2008 between Chinese auto giant SAIC Motor and smaller Nanjing Auto was one deal to pay off.

Some details of the plan also say the government will provide 5 billion yuan ($732 million) in subsidies from March to the end of this year to support rural buyers of vehicles.

The auto plan aims to ensure growing demand for cars so that China's total vehicle sales this year can exceed 10 million units, and grow an average 10% annually over the next three years.

Total vehicle sales rose just 6.7% to 9.38 million units last year. Sales plunged 14.35% from a year earlier in January 2009.

http://www.gasgoo.com/auto-news/1009455/China-aims-to-merge-carmaking-groups-to-10.html

Mini-van makers tap rural market

2009-03-10

"The Chinese auto market has entered into a new phase of diversified development. The mini-van market is going to be a blue sea that more and more car manufacturers compete in." said Yin Tongyue, President and General Manager of CHERY on the 2009 mini-van Karry sales service meeting hold recently. At that time, CHERY's new mini-van brand, Karry made its official debut and uses a new logo.


In China, mini-van can serve a wide range of purposes and have a huge consumer base. It is also nicknamed "national condition-based car ". Though mini-van had appeared as far back as in the 1980s, the mini-van market has always been haunted with a strange phenomenon: before 2004, none of the major domestic car makers, such as FAW, DONGFENG MOTOR, and SAIC MOTOR, has ever taken the top 3 positions in both the manufacturing and selling of mini cars; instead, manufacturers such as Chana, Wulin, Hafei and Changhe have taken much more advantageous positions. Some people say that in the mini-van market, second-line car makers play the leading roles while the front-line makers play the supporting parts. There are a very limited number of mini-van manufacturers that possess real competency.


However, with SAIC entering the mini-car market through joining hands with General Motor in merging Wuling motor, FAW Jiabao continuing to explore the market, and DONGFANG "Xiaokang" entering the top 4 mini-market with a market share of 7 percent, the three major domestic auto groups are making their presence felt in the mini-car market.


Even so, compared with the sedan-car market where the competition has been extremely fierce, the competition in the mini-van market is considered to be less sufficient, which offers opportunities for latecomers to take a share. Yin Tongyue, President and General Manager of CHERY, believes that under the influence of the global economy crisis on the auto industry, Chinese market is considered to be the most promising market in the world in 2009. Therefore, many car manufacturers are shifting their effort onto China. They will bring more new products, and the competition in the market will intensify. In the mini-van market, however, there are relatively fewer competitors.


2009 sees CHERY in its second year of full-scale internationalization. CHERY has 4 brands, namely Karry for mini-van, Chery for passenger car, Riich for premium car and Rely for business vehicle, all of which provides CHERY with more strength in competing in the segmented markets of the auto industry. CHERY's entering into the mini-car and mini-truck market, which belongs to the business-vehicle category, is considered to be an important strategic step for the company to achieve an annual production of one million vehicles.


Karry, as one of CHERY's brands, is pinned with great expectation by the company. It is considered to be a highly promising product that would seize the opportunity brought about by the country's policy to boost domestic demands. It is still not clear whether Karry would be able to repeat the miracle created by CHERY in the home vehicle market years ago. Still, CHERY stated that they would make their best effort to score the first place in the mini-van market.


It is told that the Karry Company is the first business unit under CHERY whose products are targeted at the 3rd and 4th-line cities and the countryside. Yang Benhong, standing Vice President of the Karry Company, revealed that after its official launching Karry would continue to integrate the production and sale of its two existing major products, while putting new products into the market successively. The year 2009 will witness an intensive output of mini-vans. Yang pointed out that Karry is committed to manufacturing quality mini-vans and providing medium to small-size cities, counties and towns with the most suitable transportation tools and the best tools that would lead them to prosperity.


In China, the majority of the population still lives in the countryside, towns and the 2nd and 3rd-line cities. Now, small towns and cities are developing quickly. The living quality of peasants and urban residents are getting better. More and more people own small business now. Yet, the consumption capacity in the countryside is still relatively low, which makes it difficult for expensive vehicles to gain popularity. Mini-vans that can be used as transportation tool as well as production tool, however, is suitable for the road conditions in villages, relatively low in price, can transport not only passengers but also goods, and is fitting for meeting the demands of the development of the economy in rural and urban areas. They are becoming the most cost-effective choice for township and rural residents.


As a matter of fact, pioneers in exploring the auto market in the countryside have tasted some sweetness. In 2005, SGMW launched a market promotion campaign in such provinces as Shandong and He'nan. Entitled "send technology to famous villages", the campaign arranged for agricultural experts to go into countryside to give technological lectures, while in the meantime, test-drives of Wuling's mini-van were organized. In villages where field conditions permit, Wuling even provided free examination and maintenance for Wuling's clients to solve practical problems in the using of the vehicles. Statistics showed that in the very year, the annual sale of Wuling's vehicle exceeded 300,000 for the first time, an increase of 37.9 percent year-on-year.



According to statistics from China Association of Automobile Manufacturers (CAAM), the speed-risings of both production and sale in the mini-van market in 2008 were higher than that of the whole auto industry. From January to October 2008, the production and sale of mini-van by major manufacturers were 1.115 million sets and 1.104 million sets respectively, with respective increasing rate of 13.4 percent and 10.8 percent year-on-year.


Nowadays, with the development of the rural economy, the replacement of agricultural vehicle by light/mini type of passenger car and truck, and economic type of sedan has become an irreversible trend. Recently, the State Council has discussed and passed in principle a plan to adjust and boost the auto industry. It is decided that the country will set aside RMB 5 billion yuan to give a one-time subsidy to rural residents who exchange their scrapped motor tricycle or low-speed truck to purchase light-duty truck, or those who purchase mini cars with a displacement that is lower than 1.3 L one-timely. This is no doubt an inspiring message for the mini-van market.


In fact, it is quite an innovative step to shift some of the effort onto the countryside when all new car types are put into cities where competition for sale is fierce. Not long ago, Chana Group announced that it would put in practice the "mini-van to the countryside" policy, taking out RMB100 million yuan of cash to compensate peasants who buy Chana's mini-vans.

http://en.ce.cn/Insight/200903/10/t20090310_18451776.shtml

The chinese nowaday want to own their own car. They believe that it brings them a comfortable live. Because the living standard in China is increasing rapidly, so they also want their live to become better. But the great number of cars will pollute the air. That is not good for health. They should think about this problem

Can someone here shed some light on this type of car

road detector car.

Detailed auto stimulus plan released

2009-03-21

BEIJING -- China aims for 10 million units in both vehicle production and sales this year, according to an online government document concerning detailed automobile support package.

China's automobile industry is to yield an average 10 percent growth for its production and sales in the next three years, said the document, released on Friday.

The stimulus package was unveiled by the State Council, the cabinet, on January 14, but the detailed plan was not released by the government until March 20.

The auto support package was among nine others for the country's 10 industry initiatives by the government since January in a bid to cope with the downturn in the short-term, and upgrade its industrial structure for the long term.

In a three-year development plan, the document said by 2011, passenger cars with an engine displacement below 1.5 liters would take 40 percent of the market, and those below 1 liter would have a 15 percent share.

Analysts say smaller-engine cars use less oil and are more environmentally-friendly. They are also cheaper compared with big-engine, gas-guzzling cars.

China would also form two to three auto giants with capacities reaching 2 million in vehicle production and sales, and four to five smaller companies with capacities greater than 1 million in the next three years through mergers and acquisitions, according to the document.

Another government paper concerning stimulus support for the steel sector was also released Friday. It said China would set up several steel giants, with the top five producing 45 percent of the steel by 2011.

Excessive capacity and low industrial concentration have long plagued China's steel sector.

Based on 2007 figures from the China Jianyin Investment Securities, the top five Chinese steel companies produced only about 20 percent of the country's steel.

The steel support plans would strive to eliminate respectively 72 million and 25 million tonnes of obsolete iron and steel production capacities by 2011.

http://www.chinadaily.com.cn/china/2009-03/21/content_7603354.htm

Anyone knows the sales tax of vehicles with engines less than 1.6 litres?