China said Saturday it wanted to boost its auto industry by reducing the number of companies in the sector through mergers and promoting two or three carmakers to become the dominant players.
"Big Three" North American capacity utilization could fall below 50 % during 2009.
In Europe :
The European commission reckons the European industry is saddled with 20% over-capacity that needs to be stripped out in time for the recovery.
More on China, from the Wall Street Journal :
China also has auto-sector concerns. The country has the capacity to produce about 12 million automobiles a year, but only 9.37 million were sold in 2008. The government's plan encourages mergers among auto makers but doesn't call for reducing capacity and is intended to consolidate the positions of major firms, according to an industry executive briefed on its contents.
Sounds like a roundabout way of saying they are going to liquidate excess capacity, despite the public claim otherwise.
The automotive industry is a major source of employment for the working class, more so than a source of profits for capital. That's why the massive and long-standing excess capacity in the industry presents a quandary. No government wants to throw too many people out of work, if they want to stay in power. But it is not a profitable industry for capital.
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