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A senior official from the China Association of Automobile Manufacturers (CAAM) revealed that China’s auto factories boasted a capacity utilization rate of over 70% in 2023.
To further optimize efficiency, idled capacity is being shuttered. Chen Shihua, CAAM’s deputy secretary-general, believes these closures will expedite improving the capacity utilization rate.
Electric Vehicle Sector Criticism:
Criticism has arisen regarding China’s electric vehicle (EV) sector, particularly from U.S. and European officials who accuse Chinese automakers of exporting overcapacity.
This trend emerges as Chinese automakers increasingly eye international markets for sales.
Assessment of Overcapacity:
Contrary to external perceptions, Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), asserts that China’s new energy vehicle sector has not yet reached critical levels of overcapacity.
Despite concerns, Chinese officials remain cautious about approving new EV production plans, wary of exacerbating overcapacity and intensifying price competition, notably spurred by Tesla’s aggressive market tactics.
Government Caution:
China’s state planner, the National Development and Reform Commission (NDRC), has exercised prudence in greenlighting new EV production projects across all automakers.
Concerns surrounding overcapacity and the escalating price war instigated by Tesla have prompted cautious deliberations by regulatory bodies.
