Chinese Special Vehicles Put on the Fast Track

The special vehicle sector in China has shown a strong growth momentum in recent years.

Figures show that the national output of the industry exceeded 800,000 vehicles during the first nine months of 2006.

According to an industry report released in 2004, 517 companies are involved in manufacturing special vehicles, most of them small and medium-sized enterprises (SMEs).

In recent years, the booming development of the special vehicle sector has attracted a growing number of leading Chinese automakers, including First Automobile Works and China National Heavy Duty Truck Group Co Ltd.

The participation of leading industrial players has spurred growth in the special vehicle sector and helped narrow the gap between Chinese special vehicle makers and their overseas rivals.

Experts estimate that the annual output of special vehicles in the country will reach 900,000 during the 11th Five-Year Plan period (2006-10), an increase of 25 percent compared with current output.

The experts' optimism is backed by the fast-growing economy of the country.

Road construction, urban expansion, energy transportation and engineering operations are all contributing factors to the great demand for special vehicles.

Key projects in the country, like the Western Development Program, the revitalization of traditional industrial bases in Northeast China and the Olympics Games in Beijing, require quality special vehicles, which is expected to drive growth of the industry.

Wit h China's access to the World Trade Organization, limits on import and export of special vehicles and components are being cut or lifted, and more overseas investment is flowing into the country. All these have helped Chinese automakers expand their presence abroad.

Chronic problems

However, China's special vehicles are still hampered by chronic problems.

In spite of the scale of production, the Chinese industry is weak in research and development. A majority of local products are labor-intensive and low value-added.

As a result, key high-tech components depend on import.

Due to fund shortage and lack of research strength, many SMEs just compete for low-end markets. Roughly 70 percent of the companies' products are very much alike, which results in cut-throat competition.

The situation has prompted authorities to plan measures to curb the development of low value-added special vehicle products over the next three years.

In contrast, high technology-content vehicles, such as urban special vehicles and vehicles for oil fields, will be listed as key products to receive priority support from the government during the 11th Five-Year Plan period, according to an industry plan being drafted.

Industrial park

Against such a background, the first special vehicle industrial park was established in the Changchun Economic and Technological Development Zone on March 1, with an aim to optimize industrial resources and sharpen competitiveness of China's specia l vehicle industry.

Dubbed as the cradle of the automobile industry of new China, Changchun enjoys distinct advantages in developing the special vehicle industry.

The city has 17 special vehicle companies and more than 100,000 skilled industrial workers.

The Automobile Engineering College of Jilin University, a key auto research base in the country, provides rich industrial human resources and strong intellectual support to the growth of the industry.

Situated at the center of the Northeast Asian economic circle, Changchun has a widespread transportation network.

In addition, the city also enjoys favorable policies of the State, aimed at revitalization of traditional industrial bases in Northeast China.

A solid industrial foundation, well-trained workforce, strong research capacity and favorable policy support make the auto city an appealing investment destination for investors from home and abroad.

Targeted as a leading special vehicle production base, the industrial park consists of two parts a vehicle manufacturing base and a component industrial park.

Changchun Special Vehicle Industrial Park aims to become a top brand for investment, trade, exhibition and information exchange.

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