China to form ‘Big 10’ group of carmakers

China plans to build a “Big 10” group of globally competitive automakers led by General Motors Corp. partner Shanghai Automotive Industry Corp. (SAIC), the China Association of Automobile Manufacturers said. The plan aims to create a first tier of automakers capable of making more than two million cars per year and a second tier of companies with capacities of one million cars or more, which would include state-run SAIC, China FAW Group Co., Dongfeng Motor Corp., Changan Automotive Co., Geely Automobile Holdings Ltd., as well as smaller companies such as Beijing Automotive Industry Group, Guangzhou Auto and Chery Automobile Co., among others. The formation of the Big 10 is part of an auto industry stimulus package which the government hopes will boost sales and production in 2009 to 10 million units, keep growth at about 10% in the next few years and boost the share of domestic brand auto manufacturers to at least 40% from the current 34%, as the Chinese car market is dominated by vehicles made by local joint ventures with foreign automakers such as Volkswagen AG, Hyundai Motor Co. and Toyota Motor Corp. (February 25/26, 2009)