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An executive for a major Chinese automobile producer says that the central government will unveil its new guidelines for the auto industry very soon.
Dongfeng Motor Corp Chairman Miao Wei also said his company is considering listing the Dongfeng Motor Industrial Investment Co (Dongfeng Investment), an investment vehicle for the parent company, on the stock market.
Miao added that Dongfeng Investment is in talks with French company Renault for the feasibility of establishing a joint venture producing passenger cars.
Miao was speaking to reporters on the sidelines of a ceremony for the capability enhancement of a plant of the Dongfeng Motor Co Ltd, a joint venture between Dongfeng Investment and Japanese car maker Nissan.
Miao quoted National Development and Reform Commission Vice-Minister Zhang Guobao as saying that "the new auto industrial policy will be announced by the end of June." But Miao did not specify the occasion where Zhang made the comment.
Miao, who used to be a senior government official in charge of China's automobile industry, said he expected that support for big auto companies with great potential would be a main theme of the document. Answering questions from reporters, he said he believed the companies supported would include both purely Chinese-owned companies and Sino-Foreign joint ventures operating in China.
Miao was a vice director-general of the automobile department of the former Ministry of Machinery Industry from 1993 to 1996, and was also the deputy chief engineer for the ministry from 1996 to 1999. The last auto industry policy guidelines were published when he was still a major government official for the industry in 1994.
Miao said he believed a major force that necessitated the making of the new document was the changes brought by China's commitments to join the World Trade Organization (WTO) concerning the auto industry.
The old document included such requirements as those for the localization of joint ventures regarding manufacturing and procurement and those for how much the joint ventures should export their outputs. These stipulations have already been ignored since the country joined the WTO in 2001.
Miao said the guidelines are much needed, because players in the industry need something concrete and substantial to guide them.
Miao said Dongfeng Corp intends to list Dongfeng Investment as a whole. But consultations first have to be made with Dongfeng Investment's other shareholders about the listing plan.
Dongfeng Investment is between DFM, the China Development Bank and the country's four asset management companies which handle the bad loans of State banks.
Miao stressed that becoming listed is just one of many options for Dongfeng's corporate financing. Others include banking loans and corporate bonds. He refused to offer any more details about the listing plan, even about where the company intends to get listed.
Miao confirmed media reports that Dongfeng is discussing with Renault the possibility of setting up a car joint venture. But he said the talks are still in their initial stages.
The parent Dongfeng company is now operating car joint ventures with multiple foreign partners, including one with France's PSA Peugoet Citroen, one with Kia of South Korea and Japan's Honda, as well as one with Nissan.
Miao was in Guangzhou for capacity expansion of Dongfeng Motor Co Ltd's plant, which is now able to produce 150,000 passenger cars per year.
(China Daily May 19, 2004)
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