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BEIJING (AFX) - China's recent transformation into a net exporter of vehicles reflects the growing ambitions of domestic automakers, but does not mean they will easily penetrate mature markets such as the US and Europe, analysts said.
According to figures from the China Association of Automobile Manufacturers (CAAM), the country imported 163,000 vehicles in 2005 and exported 172,800, continuing the trend which saw the nation becoming a net exporter for the first time at the end of last October.
While this only makes up a small proportion of China's overall vehicle sales of 5.76 mln units for the year, the country's evolution into a net vehicle exporter is significant in that it reflects the broadening reach of domestic automakers, rather than foreign manufacturers who make cars through joint ventures in China specifically for that market.
Leading Chinese automakers such as Chery, Geely and Changan have outlined their aims of breaking into mature auto markets in the coming years.
Last month Geely became the first Chinese automaker to exhibit at the Detroit auto show.
The Hong Kong-listed automaker, which sold more than 150,000 sedans in 2005, said last September that it plans to boost its annual output to two mln cars by 2015, with two-thirds to be sold in international markets, including the US and Europe.
This would be a massive expansion considering it only exported around 9,000 vehicles last year, mainly to developing markets like Latin America, the Middle East and Eastern Europe.
Chery was China's top exporter in 2005, shipping 18,000 units overseas.
The Anhui-based automaker sold a total of 185,000 cars last year, and has said it aims to launch a low cost sedan in the US in 2008.
Roland Berger Strategy Consultants said recently that low-cost Chinese cars, such as those developed by Geely and Chery, could redefine the entry-level segment of the US auto market, with prices as low as 6,600 usd.
But Chinese cars are unlikely to immediately grab a significant share of such a market as they cannot compete with established automakers in terms of quality and safety.
"As Chinese brands look to export vehicles internationally, increasing the level of quality will be imperative to ensure customer acceptance and success in other competitive markets," consumer research firm JD Power said after a recent survey.
Chinese auto exports go predominantly to developing auto markets where they have a low price advantage, face less competition and entry requirements are not as strict.
Syria was China's top vehicle export destination until December last year.
The country bought 7,456 vehicles from China last year, most of which were trucks, Automotive Resources Asia (ARA) said.
Although most of the cars go to developing countries, Belgium, became China's top export destination for 2005 thanks to shipments of Honda Fit (Jazz) models from the middle of the year, ARA said in a monthly report.
In total, 7,636 vehicles were exported to Belgium last year, ARA said.
http://www.forextv.com/FT/AFX/ShowStory.jsp?seq=74505
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