China should try to become an “automotive superpower” in order to maintain its economic growth, said the head of the country’s carmakers group, the CAAM.
This goal could be met by increasing investment in research and encouraging official use of local auto brands, Dong Yang, secretary-general of China Association of Automobile Manufacturers, said on its blog yesterday, which was cited by Bloomberg.
Chinese automakers currently spend less than 2 percent of their revenue on research and product development, which is about half the global average, Yang added. This is why the government should offer incentives to encourage research and adopt local brands for official use.
Chinese car brands are losing market share to rivals from carmakers such as General Motors, Volkswagen and Hyundai, for which China is their biggest market. Industrywide deliveries rose 4 percent in 2012, despite concerns about excess inventory, overcapacity and unhealthy price competition, Dong said.
“China should pursue a strategy of turning itself into an automotive superpower. The auto industry has become an important pillar of the Chinese economy and is crucial to maintaining stable and relatively fast growth,” Dong wrote in his blog on Sina.com.
Chinese automakers’ combined market share in China fell 1 percent in the first 11 months of last year to 41.3 percent, while German brands gained ground by 2.4 percent, according to CAAM data.