China Will Approve No New Projects to Make Traditional Fuel Cars, NDRC Says
Yicai Global
/SOURCE : Yicai
China Will Approve No New Projects to Make Traditional Fuel Cars, NDRC Says

(Yicai Global) June 15 -- China's National Development and Reform Commission and Ministry of Industry and Information Technology have jointly issued guidelines on improving the management of auto investment projects, saying that new capacity of traditional fuel cars will be strictly restricted.

China will, in principle, no longer approve new projects to set up an independent entity to produce traditional fuel cars, projects under which existing carmakers will invest in areas other than passenger vehicles and commercial vehicles, and projects under which existing carmakers that are insolvent and have stopped or nearly stopped production, posted losses for years and survived because of government subsidies and renewed bank loans seek to invest in new projects across provinces, autonomous regions and municipalities.

Existing carmakers applying to expand their production capacity of traditional fuel cars need to meet the following conditions: capacity utilization rate must be higher than the industry average in each of the previous two years, new energy vehicle capacity as a percentage of the total is to be higher than the industry average in the previous year, research and development expenses as a percentage of operating income shall be higher than 3 percent in the previous year, and products must be internationally competitive. Existing passenger vehicle makers applying to expand their production capacity of traditional fuel cars also need to meet national standards and related rules on average fuel consumption in addition to the above conditions.

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Keywords: Auto , Policy , NDRC