Shanzhai Shandong Cars? CCTV hurts Feelings, Provincial Newspaper Heals the Wounds

Shandong Province has become a base for the production for shanzhai or knockoff cars (山寨汽车), Lu Zhong Morning News (鲁中晨报, published online by Xinhua) quotes a CCTV report, and the outside’s world’s  focus is now on Shandong’s electric car industry. The reactions aren’t always friendly, writes the paper. At the same time, according to the Shandong Province Car Industry Adjustment and Revitalization Plan (山东省汽车工业调整振兴规划) and other policies and regulations, alternative-energy cars (新能源汽车) have become a breakthrough opportunity and will help Shandong to transform itself from a big automotive province into a strong automotive province (实现其从汽车大省到汽车强省的转身), writes Lu Zhong Morning News.

Provincial cities like Liaocheng (聊城, political center of Dongchangfu District / 东昌府区) and Zibo city (淄博) encouraged the development of electric cars, and private investment (民间投资) in the industry. But technological, financial [and 牌照 – seems to refer to license and registration] factors still limit the development.

CCTV made Shandong’s car industry a topic in its Economy 30 Minutes (经济半小时) program on October 23, and stated that Shandong was known as a knock-off car industry base with an annual output of 100,000 shanzhai cars.

And with that, Lu Zhong Morning News moves away from the  offensive topic, and starts touring a beautiful garden of industrial opportunities.

When the outside world hears about the car industry in Shandong, heavy trucks (重型卡车), light vehicles (轻型汽车) and motorized agricultural tricycles (三轮农用车) come to peoples’ minds, writes the paper. Among them, China National Heavy Duty Truck Group (山东重汽), Weichai Power Company Ltd (潍柴动力), and Shandong Shifeng Group (时风集团) are familiar names. In 2008, Shandong produced 167,000 heavy-duty vehicles (重型汽车), 302,000 light vehicles (轻型汽车), and 1,499,000 motorized agricultural tricycles or low-speed vehicles (三轮及低速汽车) – 30.9 per cent, 27.4 per cent, and 74.6 per cent of China’s national output respectively.

But compared to places like Jilin (吉林), Shanghai, and Anhui, all of which are also striving for the position of a big automotive province or city to a strong automotive province or city, Shandong Province still looks comparatively slow. Lu Zhong Morning News quotes Shandong Automotive Industry Association’s (山东省汽车行业协会) executive vice president Wei Xueqin (魏学勤) as having said previously that while Shandong Province may count as a big automotive province, it can’t count as a strong one, as there were still structural conflicts (结构性的矛盾). Besides, in terms of passenger cars (轿车), Shandong’s share in China’s national output is rather small. With an output of 164,000 in 2008, Shandong only accounted for 3.24 per cent of national output. Lu Zhong Morning News cites rather low degrees of specialization and little value added in exported products, as well as traditional energy sources and low efficiency as points of criticism of Shandong’s automotive industry.

But it is exactly for these reasons that Shandong could achieve the status of a strong automotive province,  by developing an alternative-energy automotive industry, writes the paper. If the plans drawing on this assumption still shouldn’t turn out to be unbeatable, the plan’s title certainly is: Shandong Province People’s Government General Office’s Opinions Concerning the Promotion of Alternative-Energy Car Industry Development (山东省人民政府办公厅关于推进新能源汽车产业发展的若干意见). The plan will support Shandong Shifeng Group (see above), Qilu Buses Company (齐鲁客车公司), Yantai Medium and Premium Buses Company (烟台中上客车), etc,  writes Lu Zhong Morning News. The newspaper has spotted some early structural changes, such as Weichai Power Company Ltd having formed a Shandong Heavy Industry Group with two further companies in June, and other automotive companies also moving into the direction of alternative-energy cars.

Lu Zhong Morning News concludes that

one can say that under official guidance, Shandong is now accelerating its transformation from a big automotive province to a strong automotive province. Powerful private investment is also a driving force in achieving this goal. “The policies are now clear, the market has a big potential, what we are now thinking of is development”, a responsible at Shandong Tangjun Ouling Automobile Manufacture Co., Ltd earlier told this newspaper.

可以说，在官方的主导下，山东正在加快实现其从“汽车大省”向“汽车强省”的转身。而在其中，民间投资力量也成为山东实现汽车强省目标的推动力量之一。“政策已经明确，市场又存在很大潜力，我们现在考虑的是发展。”唐骏欧铃汽车相关负责人此前更是向本报表示。

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Related:
Wanted: Changes on the Global Supply Side, October 12, 2009
China-made Electric Car heads for U.S. Market, August 24, 2009
China’s Car Exports Falling, August 19, 2009