China aims at further auto sector consolidation

China plans to introduce a new policy some time in the first half to encourage further consolidation in the auto industry and develop domestic passenger vehicle brands, state media reported, citing an official from the Ministry of Industry and Information Technology. No further information was given, though the government has already made clear that the industry must consolidate before firms will be allowed to expand. Separate sources said the government aims to have passenger vehicles make up half of total vehicle sales by 2015 with domestically produced and branded sedans taking up 40% of the country’s car market. Domestic brand passenger vehicle sales totaled 4.58 million last year, 44.3% of the total. Beijing plans to consolidate the auto industry into two or three large auto groups each with a minimum annual production capacity of 2 million units.