TIANJIN, Sept. 1 (Xinhua) -- Automobile experts on Saturday urged Chinese car companies to set their sights on strong brands in a market that is predominantly taken up by overseas giants such as Volkswagen and General Motors.
Currently, China's car sector still relies heavily upon overseas technologies, with joint venture companies producing and selling about three quarters of sedans sold here, said Su Bo, Vice Minister of Industry and Information Technology.
"Joint venture companies, meanwhile, still mainly make products with imported technologies, and China has not become a major player yet in independent innovations," Su said at an international car forum held in Tianjin in north China.
Chinese car firms have almost no place in the luxury car market, which is dominated by well-established names such as Audi, BMW and Mercedez-Benz. In a recent development, U.S. auto maker Ford announced that it will introduce its luxury Lincoln brand to China in the second half of 2014.
Su warned that long-term dependence on overseas technologies and brands may further weaken Chinese companies' ability to establish their own brands and improve their ability to innovate.
China's auto sales and output both witnessed an average 20-percent annual growth over the past decade, according to the official.
However, the world's largest auto market faces a potential overcapacity problem after that explosive growth over the past decade, said Chen Bin, director of the Industrial Coordination Department of the National Development and Reform Commission, China's top economic planner.
The robustness of the Chinese auto market since 2000 has come on top of growing appetite among Chinese consumers for cars and years of government support policies including tax breaks and subsidies for the sector, Chen said.
"The great market demand has pushed many car producers to expand production, but this has led to problems such as poor industrial structure, brand incompetence, and inadequate innovations," Chen said.
Furthermore, a more severe issue is starting to bite -- both growth and sales of the car industry have slowed dramatically in recent years after astounding growth.
China in 2009 overtook the United States to become the world's largest auto market in terms of sales. Sales continued to surge in 2010, jumping more than 32 percent to 18.06 million units. However, growth sharply contracted to only 2.45 percent last year, with a slowing economy and the expiration of policy incentives for car purchases.
"Both the government and company management must clearly recognize that explosive market demand will not be seen again for a long period in the future," warned Chen.
The experts say time has come for the industry to turn away from pursuing quantity to pursuing quality and premium brands.
Chen said that a reasonable and stable growth will be conducive to the market's restructuring. He added that car companies should shift focus to improving the energy-saving and environment-friendly aspects of their products, and making products that can compete with overseas rivals.
Su added that the car market is currently stabilizing. Auto makers have further room for growth in both the urban and rural markets. However, the key lies in the improvement of independent technologies, optimization of product portfolios and the nurturing of brands, he urged.