Business / Auto China

Chengdu races to be China's new automotive hub

By Zhong Nan and Li Yu in Chengdu and Lu Haoting in Beijing (China Daily) Updated: 2014-04-25 06:57

Statistics from the CEDZ show it is home to 17 vehicle manufacturers and about 290 related companies that are producing such things as catalytic converters, glass, electronic components and even tires.

"Automobile production in Chengdu is expected to exceed 800,000 units in 2014, generating total sales revenue of over 100 billion yuan ($16 billion)," said Li Hua, deputy director of the CEDZ. Chengdu produced 723,000 vehicles in 2013, up 86.7 percent from a year earlier.

Li said the central government's "Go West" campaign and its continued investment in roads, highways and towns will be key factors in supporting vehicle growth in western China, at least over the next decade.

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"A further goal for the auto sector of the CEDZ is to manufacture 1 million vehicles annually by 2016 and 1.8 million by 2020, making it one of China's most important auto production bases," Li said.

The driving forces behind this change are western China's surging demand for vehicles and its fast-growing infrastructure, logistics, communications, tourism, manufacturing and agricultural development. Another factor is rising trade activity with Central Asia and Russia through the international railway linking Chengdu to Lodz, Poland, which went into operation last year.

Regional markets such as Shaanxi, Qinghai and Gansu provinces, and the Tibet and Xinjiang Uygur autonomous regions can all benefit from a booming automobile sector in Chengdu because of their proximity to the city, Li said.

Various vehicles made in Chengdu will also eventually be loaded onto railcars to ship to new markets in Kazakhstan, Russia and Belarus, he said.

Guo Konghui, an academician at the Chinese Academy of Engineering in Beijing, said that with the current global economic picture, the Chinese government wants to shift its focus from investment to domestic consumption, with car consumption playing a key role in this transition.

"Chengdu is experiencing a transformation from heavy industry to more high-tech machinery and automobile sectors," Guo said. "Thanks to the city's industrial culture, heritage and vocational education system, recruiting qualified workers will not be a problem whether for Chinese or foreign automobile enterprises."

Indeed, the city has been one of China's hubs for domestic manufacturing production for more than four decades, producing a huge volume of machinery, chemical products, electronics and metallurgical equipment.

Under an arrangement that was set up by universities, vocational colleges, Chengdu's government and foreign automakers, many courses are being taught in English, with materials supplied by overseas companies.

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