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China's car makers shift focus to exports
By Jin Jing |
March 15, 2011, Tuesday
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Print Edition
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CHINESE car makers, suffering from slower domestic sales, are focusing more on overseas markets to maintain momentum.
Domestic-brand passenger car sales in China last month tumbled 35 percent from January after government subsidies for auto buyers expired and Beijing announced strict new quotas on license plates in that city.
The China Association of Automobile Manufacturers (CAAM) said 456,900 Chinese-branded passenger vehicles were sold in the latest month. That was down 4.3 percent from a year earlier.
Sales of domestic-brand passenger cars accounted for 47.2 percent of total passenger car sales for February, also down 3.39 percentage points from a year earlier, the association said.
China's domestic brand vehicles had a boom year in 2010, benefiting from government subsidies on the purchase of fuel-efficient, smaller cars. Beijing's crackdown on vehicle ownership, prompted by traffic gridlock and smog in the Chinese capital, has also damped consumer sentiment.
"The difficulty in obtaining a license plate is also likely to lead buyers to purchase larger cars," said Jenny Gu, analyst from auto research firm J.D. Power and Associates.
She said slowing sales at home may prompt domestic car makers to focus further on overseas markets.
"As Beijing looks to slow things down domestically, it could encourage original equipment manufacturers to ramp up the pace of their international ambitions in an effort to fully utilize their ever-growing production capacities," she said.
Most Chinese-brand vehicles are targeted at the mid-to-low end of the market, and have engine capacities of 1.6-liter or less. That's the segment most hurt by the expiration of incentives.
CAAM's figures show that total sales of passenger cars with engines of 1.6-liters or less dropped 37 percent in February, month-on-month, to 681,100 units.
In the first two months of this year, the mid-to-low class segment reported sales growth of 8.9 percent from a year earlier, under-performing the 10 percent increase of the overall passenger car segment.
"We are now focusing greatly on overseas markets, which will be a very important driving force for keeping up the growth," said Jin Yibo, spokesman of Chery Automobile Co, one of China's leading self-brand car makers.
Demand for price-competitive Chinese-brand vehicles overseas may also get a boost since some Western markets have recovered from the global financial crisis.
January sales of Chery rose 17 percent to 86,299 units, while exports surged 132 percent to 10,505 units.
Wuhu, Anhui Province-based Chery earlier said it aims to sell 5,000 cars in Australia this year. The first shipment are due to arrive this month.
Chinese car makers sold 43,400 vehicles overseas in February, a surge of 63 percent from a year earlier. For the first two months of the year, auto exports jumped 48 percent to 95,200 units.
Chery was the biggest auto exporter in the first two months with 16,800 units. That was followed by Chang'an Auto Group, with 11,200 units; Great Wall Motors, with 10,800 units; and Jianghuai Automobile Co, with 8,800 vehicles.
Domestic-brand passenger car sales in China last month tumbled 35 percent from January after government subsidies for auto buyers expired and Beijing announced strict new quotas on license plates in that city.
The China Association of Automobile Manufacturers (CAAM) said 456,900 Chinese-branded passenger vehicles were sold in the latest month. That was down 4.3 percent from a year earlier.
Sales of domestic-brand passenger cars accounted for 47.2 percent of total passenger car sales for February, also down 3.39 percentage points from a year earlier, the association said.
China's domestic brand vehicles had a boom year in 2010, benefiting from government subsidies on the purchase of fuel-efficient, smaller cars. Beijing's crackdown on vehicle ownership, prompted by traffic gridlock and smog in the Chinese capital, has also damped consumer sentiment.
"The difficulty in obtaining a license plate is also likely to lead buyers to purchase larger cars," said Jenny Gu, analyst from auto research firm J.D. Power and Associates.
She said slowing sales at home may prompt domestic car makers to focus further on overseas markets.
"As Beijing looks to slow things down domestically, it could encourage original equipment manufacturers to ramp up the pace of their international ambitions in an effort to fully utilize their ever-growing production capacities," she said.
Most Chinese-brand vehicles are targeted at the mid-to-low end of the market, and have engine capacities of 1.6-liter or less. That's the segment most hurt by the expiration of incentives.
CAAM's figures show that total sales of passenger cars with engines of 1.6-liters or less dropped 37 percent in February, month-on-month, to 681,100 units.
In the first two months of this year, the mid-to-low class segment reported sales growth of 8.9 percent from a year earlier, under-performing the 10 percent increase of the overall passenger car segment.
"We are now focusing greatly on overseas markets, which will be a very important driving force for keeping up the growth," said Jin Yibo, spokesman of Chery Automobile Co, one of China's leading self-brand car makers.
Demand for price-competitive Chinese-brand vehicles overseas may also get a boost since some Western markets have recovered from the global financial crisis.
January sales of Chery rose 17 percent to 86,299 units, while exports surged 132 percent to 10,505 units.
Wuhu, Anhui Province-based Chery earlier said it aims to sell 5,000 cars in Australia this year. The first shipment are due to arrive this month.
Chinese car makers sold 43,400 vehicles overseas in February, a surge of 63 percent from a year earlier. For the first two months of the year, auto exports jumped 48 percent to 95,200 units.
Chery was the biggest auto exporter in the first two months with 16,800 units. That was followed by Chang'an Auto Group, with 11,200 units; Great Wall Motors, with 10,800 units; and Jianghuai Automobile Co, with 8,800 vehicles.
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