A government official said new facilities built in the rush to meet today's demand are a 'symptom of overcapacity' and the factory utilization rate could drop to less than 70 percent by 2013.
Government warnings are growing about excess production capacity in China's auto industry in the years to come as a result of feverish construction of new facilities by automakers.
Chen Bin, an official from the National Development and Reform Commission (NDRC), China's top industry planner, recently said that many vehicle producers, encouraged by the ongoing rapid growth in the domestic vehicle market, are adding investment to considerably expand production.
"This is a symptom of overcapacity," Chen said. "With the effect of the government's incentive policies diminishing and mounting environmental pressures, the pace of domestic market growth is likely to slow and new production capacity will be idle in coming years.".
According to NDRC projections, less than 70 percent of nationwide vehicle production capacity will be in use by 2013 if controlling measures are not taken, he added.
Overall vehicle production capacity in China will exceed 16 million units next year, according to market data.
Domestically made vehicle sales jumped by 29.18 percent year-on-year to 8.33 million units in the first eight months of 2009, making China the world's biggest vehicle market, according to the China Association of Automobile Manufacturers.
Total sales this year are predicted to hit 12 million units, up from 9.38 million units in 2008.