Expects this to be five-year plan target

The Chinese Association of Automobile Manufacturers (CAAM) estimates that China will have a production capacity of 30-million vehicles per annum in 2020. The target date for that annual production capacity is expected to be part of the government's new five-year plan to be announced later, which will form the country's economic blueprint for 2016−20. CAAM secretary Shi Jianhua is expected to state this in a speech later this week, Reuters reports, citing an advance copy of the speech. Shi is also expected to state that China's new five-year plan will aim for annual production of 2-million plug-in hybrids electric vehicles (PHEVs) and pure electric vehicles (EVs) by 2020. By 2020, the country will have already cumulatively produced 5 million such vehicles. Meanwhile, the government aims for the total market share of Chinese brands to reach 60% by 2020. By 2020, China will also aim for annual exports of 3 million units, up from the current target of 860,000 units per annum.
 

Significance: The Chinese government will set the official targets for the next five years in the upcoming five-year plan. This plan is considered the most important economic blueprint for China as it lays the foundation for drives across industry over that period. The targets laid out in the advance copy of the speech from CAAM's secretary show the detailed aims of the government, and indicate that the present government will continue to push growth of the auto market in China. Already this year, the government has stepped in to raise flagging sales in the passenger-car market in China with a tax reduction for small-engine cars, as well as a number of incentives for new energy vehicles (NEVs). IHS Automotive's light-vehicle production forecasts currently estimate that by the end of 2020 China will have the capacity to produce 40-million units per annum, and therefore will be well capable of supporting the local market demand. Our estimates show that the country already has the capacity to produce 36 million vehicles per annum. IHS Automotive also currently forecasts that the market share of Chinese automakers will increase. However, our definition of passenger vehicles does not include minibuses, unlike the CAAM's. The majority of minibus production in China is by domestic automakers, so the market share under CAAM's definition of passenger vehicles shows a far higher level for Chinese OEMs. The Chinese market has now begun to recover from the declines earlier this year, which culminated from the major nationwide dealers' destocking activities.

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