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China auto industry is quietly pressing Beijing because it helps the government copes with a jarring slowdown, top Chinese auto executives said in interviews here on Tuesday.
This fall, after six years of 20 percent or more annual growth, vehicle sales were flat or slightly negative, a shock to an industry that has borrowed heavily to build ever more factories for a market that had once seemed exaggerated.
Citing the $ 25 billion of loans on which Congress has already approved to help increase U.S. automakers green research, and the additional $ 25 billion in loans from American industry is looking this week to cope with an economy hobbled, Chinese executives are now here, the government says they also need emergency measures. They are lower taxes on trying to new cars, lower fuel prices and increased grants for research into hybrid cars and new technology.
“The Chinese Government will support, without doubt, we,” she said Cairong, director general of JAC Motors, adding that Chinese state banks have already become more willing to lend money to Chinese automakers in recent weeks as bank regulators eased restrictions on credits to heavy industry.
However, Mr She and other industry leaders said that while government officials have expressed concern to the industry about the status of deterioration, Beijing has not committed any specific, for help.

“They ask questions, but they have not said anything yet” on how aid might be structured, said Frank Zhao, Vice President and chief technology officer of Geely Automobile Holdings. “We really hope the Chinese government will come and help us.”

Michael Dunn, the Managing Director for China at JD Power, said in a telephone interview from Shanghai, which the executives’ remarks represented here, a change in the position of Chinese auto industry.

“This is the first I’ve heard of it,” he said, adding that “the market slows, Chinese automakers are going to face competition in which they have not before.”

Many of the whole China has become increasingly crowded with unsold cars as sales were slightly lower in August and September than a year earlier. However, their manufacturers rose unexpectedly transport vehicles to dealerships in November last Monday with 10 percent, compared with the previous year, trying to keep our factories busy and avoid layoffs.

Retail figures for October are due this week, and are likely to show a further decline could set off another round of price reductions in a market that is already discounting increasingly common.

Detroit has found repeatedly that increased production in the face of weak retail is a recipe for financial problems, and there is little reason to believe that it will be different in China.

Chinese auto industry is facing several threats simultaneously. Weakening economic growth, real estate prices falling and a yearlong plunge in the stock market have made consumers leery of spending money. Fuel prices in China are still high despite the recent decline in world oil prices. And Chinese auto exports, mostly to developing countries in Eastern Europe, Southeast Asia, Africa and Latin America, are starting to crumble.

China auto industry is already bigger than Japan, and is approaching sales in the industries of the United States and across Europe. China is on track to sell 10 million vehicles this year, while demand in the United States is dropped by 14 million vehicles.

Cars have played a central role in Beijing recently plans to raise the production chain, from making cheap goods that require unskilled or low skilled workers to more advanced products.

To this end, the Chinese government has offered considerable help China’s nascent auto industry in research and development, and loans from state banks.

But there is some disagreement, the Chinese auto industry about how the government can be most useful.

Some companies, such as BMW, are more government subsidies to help them develop hybrid gasoline-electric cars and other cutting-edge technologies, for which research spending could be cut if sales do not recover.

But Zheng Qinghong, general manager of Guangzhou Auto, one of China’s largest and fastest growing of automakers, said the industry needs the Chinese government to help consumers become enthusiastic again about buying cars. Retail sales have dipped a few percentage points, from 750,000 a month, sales have been growing at an annual pace of 24 percent a year ago. “The best way is to support increased demand” for cars, the steps that lower the car tax and lower fuel prices, he said in an interview.

Western multinationals would probably at least indirectly, from any government initiative to help the auto industry in China, as required by Western companies doing business through joint ventures with Chinese automakers, most of which are partly or wholly owned.

Jeffrey Shen, president and CEO of one of these joint ventures, the Changan Ford Mazda Automobile Company, said he did not know how the government would help, but that some steps have been inevitable. “I am sure that will come,” he said, the additional support for research and greater availability of loans.

The new willingness to state banks to lend money to the auto industry this fall is in contrast to the United States, where General Motors, Ford and Chrysler have found banks and other investors leery of lending to them.

The government-mandated lending quotas, not interest rates, tend to be the most important limits on bank lending in China. Regulators have begun an easing of quotas this fall, four years after the quotas imposed fairly closely in an effort to control the growth of money supply and limit inflation.

Direct loans from the government sort discussed in Washington are not necessary in China, said Mr. Zheng. “For now, the Chinese auto industry does not need rescue in the same way as the American industry, he said.

Chinese automakers facing real difficulties began only in the third quarter, and have not yet released results for this period, many of the release of results only twice a year.

Gas prices have not fallen in China because the government has pushed through regulated retail gasoline and diesel prices at stations in more than $ 3 per gallon in recent years, but not lower retail prices as Oil prices have plunged.

Government tries to encourage energy conservation and to allow oil refineries to recover from the financial, sometimes being forced to sell petrol and diesel below cost earlier this year during the peak in oil prices.

China’s top three export markets for fully assembled vehicles are Russia, Ukraine and Vietnam, all of which are fighting the global financial crisis.

Great Wall Motor has a 40 percent plunge in its monthly exports to Russia in the last three months, said Steven Wang, deputy manager of the company’s international trade division. But Great Wall Motor has yet managed to avoid layoffs because domestic sales remain strong enough to maintain employment, said Mr Wang.

China, with most automakers involved in joint ventures with U.S. automakers, and the entire Chinese auto industry now seeking its own forms of government help, also criticized any bailout for Detroit was disabled. Producers elsewhere in Asia, facing declining markets at home, too, were also hesitated to criticize.

“I support vigorous competition, rather vehicle market and recognizes that there may be exceptional cases when such a vital sector of the U.S. economy may require unprecedented actions to ensure its long-term viability and a healthy U.S. economy that benefit everyone, “said Jake Jang, a spokesman for Hyundai Motor of South Korea.

But managers at some of the smaller Chinese manufacturers, who together, especially those with hopes of entering the American market in some days, are unhappy about the prospect of assistance to Detroit from Washington.

“If GM, Ford and Chrysler get a lot of support from their government, it is not fair,” said Gordon Chen, manager of international business of Changfeng Motor, which has shown the last two cars at Detroit auto show in preparation for entry into American market in 2011 or 2012.