Chinese cars face tough times as export sales fall
Chinese own brand manufacturers face tough times as export sales fall
According to CAAM statistics, the three biggest importers of Chinese vehicles in 2013 were Algeria, Russia and Chile.
Recent news of the depreciating ruble is making things even more difficult for struggling own brand manufacturers. According to statistics from the China Association of Automobile Manufacturers, Chinese automobile exports for the first 11 months of the year fell 9.3 percent. A total of 810,000 vehicles exported by China, with 478,000 vehicles of those being passenger automobiles and the remaining 332,000 commercial vehicles. Passenger and commercial vehicle exports declined 12.8 percent and 3.8 percent, respectively.
Increasingly competitive market conditions in major automobile consuming countries has been a major factor behind the decrease in Chinese automobile exports. Furthermore, several governments’ polices were made in mind to limit the success of Chinese automobiles in their respective markets.
That said, foreign markets still remain a promising area for own brand manufacturers. With the domestic market growing increasingly competitive, foreign markets provide an opportunity for Chinese manufacturers to recoup some of the sales they’ve lost to joint ventures in their own country.
In early 2012, export sales for major own brand manufacturers such as Great Wall, Geely and Chery had broken the coveted 100,000 mark. However, in the past few years, new tax policies and other changes in target markets such as Russia and Brazil have caused difficulties for these manufacturers.
Take for example Great Wall, which has been one of the most successful Chinese brands overseas. In 2013, the manufacturer’s export sales totaled 73,300 vehicles, representing year-on-year growth of 23 percent. However, the manufacturer has only managed to export 28,800 vehicles over the first half of 2014, down 31 percent from the same time period the previous year.
Ye Shengji, Deputy Secretary General of the China Association of Automobile Manufacturers, explained: “Large increases in import tax policies in Russia and Brazil are directly to blame for the decrease in exports.” According to official figures, import taxes for Chinese vehicles in the two countries are currently at 25 percent and 30 percent, respectively.
Chinese own brand manufacturers’ vehicles are primarily targeted at emerging markets in Latin America, Eastern Europe, Africa and the Middle East. According to CAAM statistics, the three biggest importers of Chinese vehicles in 2013 were Algeria, Russia and Chile. Analysts have praised own brand manufacturers’ recent attempts to increase localization activities in foreign markets, stating that such methods are essential for reducing costs and improving product competitiveness.