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China's auto industry faces export challenge
Updated:Dec 1,2011  15:34

Chinas vehicle exports increased nearly 250,000 units in the first 10 months of the year from a year earlier, contributing 54 percent of the countrys vehicle production and sales growth during the period. 

Exports have become the main driving force behind the growth in the countrys vehicle production and sales this year. The China Association of Automobile Manufacturers predicts that the countrys annual vehicle exports may reach a record high of more than 800,000 units this year. However, certain challenges lurk despite strong export growth. 

Sharp contrast: Over 18 million cars produced, only 580,000 exported 

China has been leading the world in both the production and sales of vehicles for two consecutive years in 2009 and 2010, producing and selling more than 18 million vehicles a year 

Zhi Luxun, deputy director of the Department of Mechanic, Electronic and Hi-tech Industry under the Ministry of Commerce, said that automobile trade accounts for around 10 percent of global trade, a proportion higher than that of any other goods. 

China exported 580,000 vehicles last year, accounting for 3 percent of its total vehicle output. Even the expected record-high annual vehicle exports of 800,000 units in 2011 will only account for 4 percent of the country’s total output. 

Cut-throat domestic competition: 500 enterprises export 580,000 vehicles

"There are too many car exporters in China, with the total number standing at around 500. Each exporter exports about 1,000 vehicles on average," Zhi said. 

Chinas auto sector is weak in industrial organization capacity and overseas after-sales services. Furthermore, Chinese automakers have under-priced domestic competitors on the exports market in order to seize orders, which has not only harmed the interests of automakers but has also seriously affected sustainable development of Chinas auto exports sector. 

Research shows that Chinese auto brands comprehensive international competiveness index stands at only 41 percent of the United States, 42 percent of Japan, 47 percent of Germany and 61 percent of South Korea. 

Zhi said that Chinese government has paid attention to the cutthroat competition among Chinese automakers in overseas markets. The disorder has considerably squeezed profit margins of automakers and made them lose sustainability. Therefore, the Chinese government will raise the exports threshold to keep automakers with overly volatile export records from entering into overseas markets. 

To supplement the implementation of the outline on rejuvenating the auto industry issued by the State Council, the Ministry of Commerce and seven other departments released opinions in 2009 on supporting sustainable and healthy development of auto component exports sector, the focus of which was to create a fair and sound competitive environment for automakers international expansions. 

China has been working on the establishment of some public service platforms involving research, development, information and export certification to automakers.

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