Ajan Henki (subtitles in English)
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Why businesses owned China make more cars than they can sell.
Observers overseas often worry about overcapacity in China's auto industry.
But the problem afflicts some foreign manufacturers or Chinese private enterprises at least three car manufacturers belonging to the state, however, have amassed a huge excess capacity and are in no hurry to reduce it.
Why Because Crown corporations have no reason to align production with demand, they remain on government subsidies and profits from their joint ventures with foreign automakers.
China Changan Group owned-Co is in the worst shape two of its subsidiaries, Hafei Automobile Industry Group Co and Jiangxi Changhe Automobile Co can build up to 700,000 small cars and microvans, but sold only 15,000 units last year because of mismanagement and poor quality.
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Chery Automobile Co. China's largest car exporter, has four assembly plants with a total capacity of 900,000 vehicles Yet he sold less than 500,000 units last year.
Other companies belonging to the State are in poor condition, too FAW Car Co could produce 400,000 vehicles per year, but it only sold 205,000 cars last year.
If these builders were private, no one could survive, but because they belong to the state, they have close links with local governments that favor huge subsidies.
Take Chery operating well below capacity, the company lived on government subsidies to 65 million annually Similarly, Hafei and Changhe receive local subsidies provinces of Heilongjiang and Jiangxi They are also supported by the Changan Group, which receives financial support from the central government.
car manufacturers belonging to the state were also kept alive by their joint ventures with foreign automakers FAW Car, for example, has suffered huge losses during the last year, but its parent company rakes in profits joint ventures with Volkswagen and Toyota.
In addition to the major car manufacturers owned such as Changan and FAW, dozens of small automakers owned are very few vehicles they survive on local government subsidies.
Given these automakers ineffective in life thrives taxpayer But China is not a democracy, the government can use tax revenues to keep these businesses alive as long as he wants.
China Car Makers domaniale Don t Care About World News Overcapacity, China, manufacturers, overcapacity, new.
Каре, 40500, Франция