East China's Shandong Province will spend 80 billion yuan (US$9.7 billion) to strengthen its automotive industry by 2008, a government report has revealed.

Commenting on the report, Wang Renyuan, vice-governor of the province, said by 2005 it will be able to make 800,000 complete automobiles, with the output of its heavy and light-duty automobiles ranking it first in the country with 600,000 units, in addition to its 150,000 sedans and 50,000 other kinds of vehicles.

By 2010, the production output of automobiles will reach 1.7 million units, as the province becomes a new automobile base for the nation.

The vice-governor said Shandong has a sound foundation for the strong development of its automotive industry, and its future development will depend on the production expansion of China's top automakers and several foreign brands, instead of blind investment leading to excessive production.

Located in the capital city of Jinan, China National Heavy Duty Truck Group Co (CNHTC) boasts a 40 per cent domestic market coverage with its trucks, which have a carrying capacity above 15 tons.

In June, a joint venture worth US$200 million, funded by CNHTC and Volvo, was put into operation. It is expected to produce 2,000 heavy-duty trucks annually and expand annual production to about 5,000 units within 10 years.

In the future, Shandong will emphasize high-level heavy-duty trucks above 300 horsepower, and luxury and environmentally friendly passenger cars.

Shandong has a total of five light-duty automakers. Statistics from the Shandong Trade and Economic Committee show last year the province produced nearly 100,000 light-duty cargo trucks.

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