Due to the removal of government incentives, purchase limits in some cities and rising oil prices, auto sales registered a 3.25-percent year-on-year growth rate in the first half of the year after surging 30 percent in 2010 and 50 percent in 2009. Home-grown brands were badly hit as consumers turned to foreign brands for better quality and performances.
Beijing created a car-quota system to combat traffic woes in January, allowing only 240,000 new cars to be registered in the city this year, compared with the 800,000 new automobiles that took to the streets in 2010.
"It is a certain stage that the sector has to go through, though a difficult one," Zhang said.
Guan Xin, dean of Auto Engineering School of Jilin University, was positive about the future of home-grown brands.
"The country's auto market still fosters huge potentials as the demand is strong," said Guan, adding that the cause behind the drop is the backward technologies and the problem will be resolved as the sector makes technological advances.
Meanwhile, Zhang suggested that home-grown brands should not rely on policies for growth as the country's auto market is a quite open one.
"Industry restructuring is inevitable. Products and enterprises that fail to withstand the test of the market should be weeded out," Zhang said, adding that policy support should only be limited to technological research such as in the component sector.
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