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The issue of overcapacity in China's automotive industry has drawn significant attention from the National Development and Reform Commission (NDRC). Ma Kai, the head of the commission, recently pointed out that China's auto production capacity has already surpassed 2 million vehicles annually, raising concerns about potential market imbalances. This warning comes as the sector continues to expand rapidly, with many manufacturers increasing their output without a corresponding rise in demand.
Experts believe that during the "Tenth Five-Year Plan" period, the NDRC began to highlight the growing problem of excess capacity in the auto industry. This signals a broader concern about the risks of overinvestment, especially as both domestic and foreign investors show strong interest in the sector. In response, the government may consider raising entry barriers for new auto projects to prevent further overexpansion.
Chen Bin, deputy director of the Industrial Development Department at the NDRC, previously warned that the overcapacity issue is expected to worsen during the "Eleventh Five-Year Plan" period. If left unchecked, the country's auto production capacity could reach as high as 20 million units by the end of the plan—far exceeding actual market demand. To address this, Chen suggested tightening the approval process for new automobile manufacturing projects.
Zhang Boshun, secretary general of the China Association of Automobile Manufacturers Market Trade Committee, supports the idea of increasing the threshold for auto projects. According to reports from *Daily Economic News*, these measures are likely to be implemented in the near future to ensure sustainable development of the industry and avoid a potential market crash caused by oversupply.
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