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Some existing 2020/25 targets reiterated with some additional targets
today, China’s Ministry of Industry and Information Technology (MIIT),The
National Development and Reform Commission (NDRC), and The Ministryof Science
and Technology (MoST) jointly announced the national Mid-to-longDevelopment Plan
of Auto Industry to provide thedevelopment guidance of the auto
industry. Key benchmarks are:By 2020, the annual sales/production target of
new energy vehicles (NEVs)is expected to reach 2m units, and the NEV
sales/production is expected toaccount for 20% of total auto sales/production by
2025, with improvingenergy density and lower per hour unit cost.
the penetration of new vehicles equipped with DA (driverassistance), PA (partial
assistance), CA (conditional assistance) aretargeted to reach 50%/80%. The
penetration target of the more advancedconnected DA is expected to reach 10%/25%
By 2020, average fuel consumption of new passenger vehicles (PVs)
andenergy saving vehicles is targeted to be lowered to 5.0L/100km and4.5L/100km,
respectively. Meanwhile, average fuel consumption ofcommercial vehicles (CVs)
should be comparable to leading internationalstandard with the adoption of
national VI emission standard. By 2025,average fuel consumption of new PVs
should reach 4.0L/100km and CVs’fuel consumption should stay comparable to
leading international standard.
Establish “OEM-part supplier” cooperation
relationship and encouragecoordinated development of OEM and suppliers. By 2020,
China targets togroom some auto suppliers with over RMB100bn revenue, core
technologyownership and strong global competitiveness. By 2025, China aims
athaving world leading OEMs and auto suppliers.
Continue to expand the
market, utilize foreign capitals and bring inadvanced technology and talents;
encourage JVs to increase the R&Dexpenditure, and gradually relax foreign
OEMs’ JV share holding limits.
By 2020/25, the after-market service revenue
is expected to reach45%/55% of the total auto industry value chain’s
Deutsche Bank view – positive implications for advanced suppliers
and dealersSome of the targets above, including NEV sales and fuel efficiency
targets, arealready mentioned in previous government’s papers and should support
ourview of strong NEV demand growth prospect. For the remaining targets, wethink
that the adoption of driving assistance systems, together with tightenedfuel
efficiency requirement going forward, should provide new businessopportunities
to advance part suppliers. Last but not least, we do not expectsudden change in
auto OEM JVs’ shareholding structure since most of existingJVs’ shareholding
agreements will still last for another many years.