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Chinese government recently warns that China automakers should pay attention to overcapacity due to global economic turmoil. Mr. Chen Bin, an official from the National Development and Reform Commission (NDRC), China"s top industry planner, says that many vehicle producers, encouraged by the ongoing rapid growth in the domestic vehicle market, are adding investment to considerably expand production. This is a symptom of overcapacity.
According to NDRC predicts that nearly 70 percent of nationwide vehicle production capacity will be in use by 2013. Hence, government needs to take some control measures to prevent overcapacity.
All in all, auto experts believe that China’s vehicle production capacity will exceed 16 million units next year. Total sales this year are predicted to hit 12 million units, up from 9.38 million units year-on-year.