China’s national government has adopted a number of policies recently that could have significant impacts on its auto industry, but Gu said their effect on sales trends will decrease as time passes. He noted, for example, that three agencies have issued a joint statement encouraging mergers and reorganization of leading businesses in nine key industries, including the auto industry. The statement also encourages Chinese companies to globalize and take part in cross-border mergers and acquisitions. Gu predicted that this will lead to domestic market share being concentrated with a smaller number of companies, several of which will develop core competitiveness.
The government currently offers subsidies for purchase of vehicles that provide better-than-average fuel economy, and Gu noted that a policy adopted last year calls for significantly larger subsidies on alternative energy vehicles.