The National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly issued a new guideline for foreign investment, moving “finished car manufacturing” from the “encouraged” list to the “approved” list, but the move will not affect existing Sino-foreign joint ventures in China’s auto sector. An NDRC official explained that the move was the result of excesses in both production capacity and finished automobile companies in China. “It was a normal adjustment in light of the development of China’s auto industry,” said the official with the NDRC’s Department in charge of foreign investment, who declined to be named. “There is no issue of tightening up, nor will it affect the operations of existing joint ventures in China,” added the official. China has been the world’s largest auto producer and market by volume since 2009. Sales hit 18.06 million units in 2010, while output rose to 18.26 million units. The country has more than 130 finished automobile producers, more than any other country, but the companies are scattered and not strong enough, as mergers and acquisitions (M&As) have been slow. The government has controlled approvals of new finished auto projects more rigorously in the past two years to curb overcapacity. About 70% of domestically made cars are produced by Sino-foreign joint ventures in China.

ITT Corp sees potential business opportunities in China’s policies for the development of electric vehicles. The company announced that it will invest USD10 million in a braking technology production base and a research & development (R&D) center in Wuxi in Jiangsu province. Luca Savi, President of the company’s Motion Technologies Division, said the sum is just the initial investment and more funds will be made available as the project develops. ITT closely cooperates with BYD Co in the electric-vehicle business. “We will promote our charging-connector products and solutions in China and abroad because there is a continuing demand for electric autos,” said Denise Ramos, ITT’s CEO and President. Bill Taylor, President of ITT Interconnect Solutions, said the company will promote charging equipment in accordance with Chinese standards in the second quarter of this year, cooperating with BYD. The company has seen total annual revenue of USD2 billion over the past two years, 5% of which came from its businesses in China, according to Ramos.

Volkswagen said its sales on the mainland and in Hong Kong climbed 18% last year to a record, led by deliveries of Lavida and Sagitar and demand for Audi luxury cars. The VW group, which also owns the Skoda and Bentley brands, sold 2.26 million vehicles in the two markets. General Motors, the biggest foreign carmaker in China, increased sales in the nation by 8.3% last year to a record 2.55 million vehicles. China is now the largest market for VW, its premium Audi brand and luxury Lamborghini. “Although we expect tougher conditions for the car industry to come, we want to maintain our leading market position in China,” said Karl-Thomas Neumann, Chief Executive of VW’s China operations. “We see a great potential for an expansion in China’s rural areas where millions of people will benefit from better mobility.” Growth in vehicle demand is expected to accelerate this year to about 9.5%, or about 15.87 million units, from the 5.2% pace last year. Car sales rose 33% in 2010 and 53% in 2009. The German carmaker sold 1.72 million of its main Volkswagen brand cars in China, an increase of 14% from a year earlier. This amounts to 34% of the brand’s global deliveries of 5.1 million vehicles last year. Audi increased sales on the mainland and in Hong Kong by 37% to a record 313,000 vehicles last year, the company said. It became Audi’s largest market globally last year. Audi boosted deliveries of imported cars such as the Q7 sport-utility vehicle (SUV) and the Audi A8L. The carmaker also sold more domestically produced A4L and A6L cars, whose wheelbases were extended to meet the needs of chauffeur-driven Chinese buyers. VW, which has joint ventures with FAW Group and SAIC Motor, was the first foreign carmaker allowed to produce cars in China. The company has said it would add a seventh factory in China as part of plans to invest €14 billion to expand production and models by 2016, the South China Morning Post reports.

Jaguar Land Rover, the British car maker owned by India’s Tata Motors, aims to double its sales in Hong Kong over the next five years with an eye on boosting its profile both locally and in the mainland market, according to Joseph Lau, Hong Kong Brand General Manager of distributor Inchcape. “Hong Kong is a unique market because it is not very big … but there are so many affluent Chinese visitors coming here,” said Lau. “They see what is popular among Hong Kong people and view those brands as high quality. That way they get automatic recognition on the mainland.” Inchcape is using local launches of new Jaguar Land Rover models to also target prospective mainland buyers. The company hopes to double local sales of JLR vehicles in the next five years, up from an expected 135 Jaguar deliveries this year and 250 Land Rover deliveries. The mainland is set to overtake the U.S. as JLR’s biggest market after the UK as early as this year. Land Rover’s mainland sales rose 54% in the first 10 months of last year to 27,761 units, while Jaguar’s rose 91% to 4,382 cars. JLR plans to open 100 Chinese dealerships by the end of the year, up from 80 at the end of October. Demand for some Land Rover models, such as the newly launched Evoque, is such that Chinese buyers ordering a new car may have to wait up to one year for delivery. Inchcape is in the process of spending around HKD2 billion to add 16 new Chinese dealerships by 2016 to the four it now operates there.

General Motors will concentrate on luxury sales in China in the next three to five years as increasing wealth drives demand for premium vehicles. GM plans to expand its Cadillac range to compete for affluent consumers who are buying BMW and Audi cars, according to President Kevin Wale. The company aimed to increase production capacity in the country by as much as 40% in the next two years, he said in Shanghai. “Luxury-car sales will continue to grow faster than the overall passenger car market, driven by increasing wealth,” Wale said. The segment was “a key area of focus” for the company over the next three to five years, he added. GM was pushing to sell more premium cars to meet the next wave of luxury demand from an emerging class of successful entrepreneurs, Wale said. Overall car sales in China might rise between 7% and 10% next year, with demand for trucks and mini-commercial vehicles rebounding from a probable decline this year to expand 5% next year, according to Wale. The market “remained fairly resilient”, he added. China could overtake Germany as the world’s second-largest market for luxury vehicles this year, trailing only the U.S., according to research firm LMC Automotive.