China's threshold for
investment in new auto projects is to rise to curb emerging
overcapacity, the National Development and Reform Commission (NDRC)
announced on Tuesday.
To set up new plants the automakers must be able to
sell at least 80 percent of the annual production capacity
registered with the government.
Other automakers must sell 100,000 sedans, 50,000
sports utility vehicles (SUVs) or 50,000 multi-purpose vehicles
(MPV) annually.
The country's production capacity reached eight
million units on July 1, 2005 and was expected to hit 10 million in
2007. But demand was only 71.5 percent of capacity in 2005.
Capacity will far exceed demand in 2010, said a NDRC
source.
By the end of the year China will overtake Germany to
become the world's third largest auto manufacturer after the United
States and Japan, according to the China Association of Automobile
Manufacturers.
During the first 11 months production reached 6.59
million, up 27.92 percent from the same period last year, while
sales grew by 25.49 percent to 6.45 million.
(Xinhua News Agency December 27, 2006)
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