Production rises 30%, fuels range of other sectors

By producing more than 410,000 vehicles last year, Chengdu's auto industry grew 30 percent, more than four times the national average for passenger vehicles.

The capital city of Sichuan province is now the nation's third-largest automobile market and the biggest in the western region.

About two million vehicles are now on the road in the city.

Revenue from Chengdu's auto industry hit 71.6 billion yuan ($11.6 billion) last year, an increase of 51.6 percent over 2011, said Zheng Xueyu, director of the auto industry office for the Chengdu Economy and Information Committee.

"The target for the city's auto industry in 2013 is to produce 600,000 units with carmakers generating revenues of 105 billion yuan," Zheng said in a recent interview with China Daily.

It would be a dramatic increase from 2011 when 150,000 vehicles and revenues of 55 billion yuan were produced.

"The added value from the industry was 29.6 billion yuan last year, an increase of 42 percent at a time when the national auto market had slower growth," Zheng said.

The industry's prosperity is fueling a boom in Chengdu's overall manufacturing sector, helping stimulate the iron and steel, machinery, electronics, glass, petrochemicals and related service industries. "Every 1 percent the auto industry grow boosts upstream and downstream industries by 17 percent," Zheng said.

Chengdu has always been a major market in western China, but it almost entirely lacked an auto industry.

Yu Jian, director of the auto industry department at the Chengdu Economic Development Zone, said that the city produced only 800 agricultural vehicles a year in 2003.

The CEDZ, some 13.6 kilometers east of the city is now the core of Chengdu's auto industry.

Chen Xiaoming, deputy officer of the auto industry department at the CEDZ, said growth in Chengdu meets the central government's "go west" strategy, bringing more investment and job opportunities to the city.

"Chengdu has competitive edges in its talent and business environment, which the local government put in lot of effort to improve further," he told China Daily.

In 2004, the provincial and municipal governments set the tone for developing Chengdu's auto industry.

When the local government set up a promotion commission for the automotive industry in 2008, the only significant production was 40,000 units of the Volkswagen Jetta.

In 2011, Volvo Group announced it would build its first China plant in Chengdu.

In 2012, parts supplier Robert Bosch GmbH laid the foundation for its second chassis plant in the country.

Early last year, FAW-Volkswagen's 540,000-unit Chengdu facility was completed, helping bring auto production capacity in the city to 1 million annually, two years before the original target date.

Chengdu is now an important production base for FAW-Volkswagen, FAW Toyota, Volvo and Geely. It has 275 related enterprises, 19 of them making finished autos, Zheng said.

pengchao@chinadaily.com.cn

(China Daily 04/26/2013 page19)