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China Urges Weaker Carmakers to Merge
Chinese regulators indicate they may encourage the country's weakest carmakers to merge or be acquired as an alternative to government-backed measures to boost new-car demand, Bloomberg News reports.
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Chinese regulators indicate they may encourage the country's weakest carmakers to merge or be acquired as an alternative to government-backed measures to boost new-car demand, Bloomberg News reports.
The news service cites comments over the past weekend by the deputy directors of the National Development and Reform Commission and the Ministry of Industry and Information Technology. The officials point to "severe" structural problems and profitability challenges for many domestic carmakers as the country's car sales drop below year-earlier volumes.
Beijing has been pushing for years to sharply reduce China's 100 or so vehicle producers, many of whom build only a few thousand cars per year.
Last week the China Assn. of Automobile Manufacturers called on the government to stimulate demand with tax breaks and looser restrictions on license plates in large cities. But critics suggest market forces be allowed to force out weak companies, Bloomberg notes.
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