【正文】 akers are able to establish a tie up with two Chinese panies, a joint venture with Guangzhou Automotive Industry by Toyota, which is currently forming an alliance with China FAW, is expected to win approval at an early date.D facility and continuously improve its levels. Meets a mandatory technical standard.Note:The lowest annual production volume is clearly indicated as part of conditions regarding production of passenger cars and heavyduty trucks.Fourcylinder engine passenger cars: 30,000. 6cylinder engine passenger cars: 50,000. Heavyduty trucks: 10,000.■The new auto policy succeeds in restrictions on vehicle production by foreign capital while restrictions are not applied to investment in the establishment of an export baseD facilities with an investment of more than 500 million RMB, a total investment of more than 2 billion RMB, and selffinancing of more than 800 million RMB. Companies that enter into production of passenger cars and heavyduty trucks are also required to manufacture their engines.Companies and products that fail to meet conditions for certification are eliminated from notification。Authorization of production to automakers had previously been referred to as permanent qualifications, but the new auto policy makes clear provisions for the shut down of automakers. In concrete terms, names of automakers that fail to sustain management are made public and those panies are prohibited from transferring qualification of production to nonautomobile panies. In addition, panies whose names are made public are encouraged to shift into production of specialty vehicles and automotive parts, or to reorganize with other automakers. an accumulated total of those panies has amounted to 24 since 2000. Including those new entrants, more than one third of the 117 automakers were reported to be suffering from a deficit at the end of 2002.894,957%Total4,443,686%Source: China Automotive Industry Newsletter of Production amp。s announcement in a shorter time than before.Participation by foreign capital into such reorganization is also encouraged. The new auto policy supports large auto corporate groups jointly in foreign auto groups consolidating/reorganizing automakers inside and outside of China, thus expanding their business range. In such a case, the restriction that limits the number of foreign shareholders to as many as two is not applied.One of the requirements to bee a largescale corporate group is having a 15% share of the market in China。As a principle of policy operation, integration is maintained of a basic role of resource allocation based on market mechanisms and macroeconomic adjustment by the government. One of the policies that bring the principle into shape is mandatory formulation of a development plan by a largescale automobile corporate group, which mutually plements a medium and longterm development plan that National Development amp。s first industrial policy.■Objectives by 2010 under China39。Against the backdrop of rapid growth and under the Automobile Industry Development Policy (issued in June 2004), which serves as guidance for China39。In June 1, 2004, the Chinese government officially announced and enforced the Automobile Industry Development Policy (new auto policy), which replaces the Industrial Policy for the Automobile Industry (formulated in 1994) as a new signpost and policy for development of the automotive industry. The new auto policy does not change the current move toward the expansion of a partnership with foreign automakers. The new policy aims to make China join with major auto producing countries by the standards of developed countries in 2010 using a partnership with foreign capital as the driving force.China39。s automobile policy, the following objective has been set: The fostering of China39。s Automobile Industry Development Policy * To make the automotive industry into a core industry of the Chinese economy.* To foster a sound consumer market by promoting cooperative development of related industry and transportation infrastructure, and environmental protection.* To join among major auto producing countries worldwide, and to almost satisfy domestic demand and to export products in large amounts overseas.* To improve capability for Ramp。 Reform Commission designs. Largescale automobile groups themselves formulate their own development plans based on the medium and longterm plan and carry out the plan independently as it wins approval from National Development amp。 currently two groups, China FAW Group Corp. (FAW Group) and Shanghai Automotive Industry (Group) Corp. (SAIC Group) have a marketshare of 15%. The new auto policy supports automakers developing into largescale automobile corporate groups in the form of resource restructuring or encourages an automaker to form an alliance by plementing each pany39。 Sales ■To streamline the structure of the industry by promoting selection and reorganization and by tightening conditions on the establishment of new automakers therefore, business activities of those panies are virtually terminated. Moreover, under the new auto policy, requirements for approval for production by panies include requirements for capability for design and development, production facility, stability of production and quality control capability, capability for sales and aftersales service. like the example of Honda39。Though the standard for a localcontent ratio in terms of vehicle production was abolished, import controls were introduced to foster autoparts industry and suppliers.However, models introduced from overseas partners accounted for 88% of the increased passenger car production of million in China in 2003. It is necessary to develop advanced practical technologies by holding intellectual property rights through independent development to achieve a target of exporting products in large numbers as one of the major auto producing countries. Y