Customs figures show China's car exports surged 120 percent from 78,000 units in 2004 to last year's 173,000 units. This year, the figure is expected to top 300,000 with sedans accounting for 90,000, more than double the figure from a year ago.

A problem China must face is that about 600 of the 1,025 firms that exported vehicles -- whether they be manufacturers or trading agencies -- exported less than 10 units. A staggering 160 firms exported only one car per year.

In introducing licensing, China hopes to weed out firms with minimal exports as well as companies that fail to guarantee product quality or provide solid after-sale service. Such firms will be prohibited from exporting automobiles to prevent further damage to the reputation of the indigenous car industry.

In August, the Chinese government designated Changchun, Shanghai, Tianjin, Wuhan, Chongqing, Xiamen, Wuhu and Taizhou as the sites of the country's major auto factories and its major export production base.

China-made automobiles are mainly sold to emerging markets such as the Middle East, Latin America and Russia. The goal of China's auto industry is to account for 10 percent of the world's auto trade in 10 years, in other words to achieve export orders worth more than 120 billion US dollars.

1

2

(For more biz stories, please visit Industry Updates)