Xu Heyi, Chairman of BAIC Holding Group, shared his insights on the future of the automotive industry in China. He pointed out that with the government's various economic stimulus policies being rolled out, large-scale infrastructure projects are expected to drive demand. As a result, commercial vehicle sales, particularly for heavy trucks, are anticipated to outperform those of passenger vehicles next year.
"In 2009, the production and sales volume of domestic automobiles will remain relatively stable," Xu said. He noted that while the growth rate of the automotive industry was lower in 2008 compared to previous years, the fundamental outlook remained positive. "It may be unlikely to see GDP growth rates that are two or three times higher than usual again, but single-digit annual growth is still achievable."
Xu also highlighted that the recent drop in international oil and raw material prices will help reduce production costs for automakers, which could boost consumer demand. "The government’s rescue policies have had a clear positive impact on the auto sector, especially for commercial vehicles like heavy trucks," he added. Optimistically, he believes that the growth rate in 2009 might match that of the current year. However, he warned that the market will experience fluctuations, with more noticeable ups and downs during the second and third quarters.
Looking ahead, the overall demand for the automotive market is expected to decline, leading to lower economic efficiency. To adapt, Beijing Automotive Group plans to invest 1 billion yuan by the end of this year or early next year. This investment will focus on accelerating joint ventures such as Foton and Mercedes-Benz, the Cummins engine project, and the development of its own-brand passenger vehicles. These efforts aim to solidify the auto industry as a key pillar of the capital's economy.
One of the most significant projects is the heavy truck engine collaboration between Beiqi Foton and Daimler-Benz, which is set to become the largest and most technologically advanced joint venture in the commercial vehicle sector in China. Meanwhile, the cooperation between Beiqi Foton and Cummins Engine is progressing well, with production expected to start between April and May next year. Xu emphasized that this project will serve as a major highlight for BAIC, further strengthening its position in the industry.
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