China’s Auto Industry Discusses How To Increase Rural Car Sales

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China’s auto industry executives met with government authorities regarding ways to promote higher car sales in rural areas, sources knowledgeable with the matter said.

The country’s car manufacturers are grappling with struggling sales. Falling sales in China are making them seek new policies.

Zeng Guang a senior official at the China Association of Automobile Manufacturers (CAAM), verified to Reuters that the meeting had been arranged in Beijing by the association’s magazine Auto Review.

He refused to offer details of the discussions but stated participants had agreed that the present sales decline was not surprising give how China’s auto market was still developing.

Sources informed Reuters the meeting was titled “cars for the rural areas”, signifying the need to target sales outside of the country’s cities where sales have been particularly weak.

China’s state planner had issued a range of measures in June to recover from a downturn in car sales but these had fallen short of expectations of car manufacturers and done little to spur sales.

Sources with information of the meeting stated government officials informed participants they were thinking about policies to expand the second-hand auto market in rural areas and to improve vehicle retirement policies. They also prompted companies to develop electric vehicle models that are fitted for the rural market.

However, government officials cautioned that short-term stimulus policies would harm the industry’s long-term development and was not a route the country was eager to pursue. They did not make any commitments throughout the meeting, the sources stated.

Government authorities from the National Development & Reform Commission (NDRC), Ministry of Industry and Information Technology (MIIT) and Ministry of Commerce participated in the meeting, two sources with a direct understanding of the matter informed Reuters.

According to a document read by Reuters, Volkswagen’s local venture with FAW Group, General Motors’ venture with SAIC, Nissan’s venture with Dongfeng and Chinese companies including BYD were on the invitation list.

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