On October 17, the executive meeting of the People’s Government of Guangzhou adopted the Plan of Guangzhou to Construct International Auto Parts Industrial Base (hereinafter referred to as the Plan). In accordance with the Plan, by 2020, Guangzhou aims to see newly added output value of the Auto Parts Industrial Base to reach RMB200 billion and improve the local supporting rate for key parts to 80% to form up an industrial system with integrated industrial chain covering key parts for internal-combustion-driven vehicles, new energy vehicles and intelligent connected vehicles.

 

Foresighted layout：parts for new energy and intelligent connected vehicles

 

Currently, three auto part clusters have taken shape in the eastern, northern and southern parts of Guangzhou. Centering on Huangpu and Zengcheng, more than 200 auto part enterprises concentrated in the east to provide services for enterprises engaged in finished autos. In the north, more than 180 auto part enterprises concentrate in the Huadu Auto City and the surrounding areas. Centering on two enterprises engaged finished vehicles, namely GAC Toyota (Nansha) and GAC (Panyu), more than 130 auto part enterprises concentrate in the south.

 

However, compared with auto manufacturing, which holds a position as a pillar industry, and other Chinese cities at the same level, where a fast development trend has been shown by auto service industry, there is still a gap. Therefore, in addition to the objectives mentioned above, the Plan also proposes to strive to realize total exports of auto parts of USD5 billion to double that in 2015 and to have four auto part enterprises with annual operating income exceeding RMB10 billion and 50 auto part enterprises exceeding RMB1 billion by 2020.

 

The Plan said, the “153” strategy (one base, five industrial parks and three keys) should be based to construct the International Auto Parts Industrial Base of Guangzhou to foster a high-end international auto part manufacturing and export base, a national industrial cluster of auto parts for new energy vehicles and a national industrial cluster of auto parts for intelligent connected vehicles.

 

Following the principle of differential development, a number of new industrial parks will be built in Panyu, Zengcheng, Huadu, Nansha and Conghua based on existing industrial foundation. In addition to the development of supporting parts centering traditional enterprises engaged in finished vehicles, prospective layout should be made to develop parts for new energy and intelligent connected vehicles. Moreover, related public facilities for technology research and development, inspection and testing, industry incubation, financial services, business and trade logistics as well as living should be constructed in the base to integrate manufacturing with services and improve the functions of the base.

 

In addition to the five parks mentioned above, the planning for the development of auto part industry should be gradually expanded to cover Zhaoqing and Meizhou. The Zhaoqing (Gaoyao) Auto Parts Industrial Park and the Guangzhou (Meizhou) Industrial Transfer Park will be selected for such expansion. Emphasis will be laid on developing auto parts for traditional vehicles and serving as a carrier for transfer of the projects related to parts for finished vehicles in the Pearl River Delta.

 

Financial support: to establish fund of more than RMB10 billion for innovative development of auto industry

 

The Plan proposes to establish a fund of more than RMB10 billion for innovative development of Guangzhou’s auto industry, aiming to provide financial support for the development of the auto industry of Guangzhou, with emphasis laid on the development of vehicles with independent brands, new energy vehicles and intelligent connected vehicles. The investment in the auto part enterprises of Guangzhou should account for not less than 20%. Moreover, priority should be given to nominate the International Auto Parts Industrial Base of Guangzhou as key construction project at provincial and municipal level and green channel support should be provided for the initiation, planning and land use application of the project. For any newly introduced auto part manufacturing project, reward equal to 5% of the paid-in registered capital of the enterprise will be provided, and the reward for each enterprise may be up to RMB50 million. For local leading auto part enterprises and groups to carry out merger and acquisition of international key auto part enterprises and register in Guangzhou, lump-sum reward of RMB3 million will be provided.

 

Reward equal to 10% of paid-in registered capital will be provided for establishment of key parts R&D and manufacturing centers, and the reward for each center may be up to RMB20 million. For auto part enterprises newly established through internal splitting, reward equal to 10% of paid-in registered capital will be provided, and the reward for each enterprise may be up to RMB20 million. Incentive subsidy will be provided for enterprise’s investment in research and development in the previous year. The subsidy will be provided by four standards based on the quotas for expenditures. It may be up to 5% of the expenditures in research and development.

 

For inspection and testing centers, industrial standard development centers, science and technology innovation and incubation centers, talent training organizations serving auto industry, second-hand vehicle transaction platforms and other platforms that are newly established or relocated in the base and have certain scale and innovation ability, reward up to 30% of paid-in registered capital will be provided, and the reward for each organization may be up to RMB50 million.

 

Subsidy not more than 30% of investment or loans with discounted interest will be provided for industrial park operators to construct public service platforms and supporting facilities, and the amount for each project should not exceed RMB5 million. For industrial associations and intermediaries to operate platforms for management of big data on vehicles in full life circle for social public services, subsidy equal to 30% of actual investment will be provided, and the amount will be up to RMB3 million. For enterprises in the parks to use public service platforms in the parks, subsidy equal to 30% of their expenditures will be provided after verification, and the annual subsidy for each enterprise may be up to RMB1 million. For enterprises and organizations that play a leading role in making national standards and regulations on intelligent connected vehicles or that participate in the formulation of international standards and regulations on intelligent connected vehicles, subsidy of up to RMB800,000 may be provided for each project.

 

In addition, there will be not less than 100 special quotas for “green card for talent” allocated to the auto and parts industry. Great efforts will be made to support eligible talents to enjoy relevant policies of Guangzhou on subsidies for expenditures, supportive rewards, green cards for talent and housing guarantee.

 

Source: Translated from Invest Guangzhou, October 18, 2016