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China Eyes Global Auto Market

In the first 10 months of 2005, China's exported autos increased 133.6 percent year on year. For the first time, auto exports exceeded the import by 7,000 units, including 105 electric cars exported to the U.S. Photo of Miles ZX-40, an electric car it plans to import from China.

Published: 02-Jan-2006

ing, Dec. 22 -- While the world auto giants have started Chinese language training, Chinese auto makers have been writing their introduction brochures in Arabic, Russian and other languages. Faced with more challenges than that though, Chinese autos are making their way to the global market.

    In the first 10 months of 2005, China's exported autos increased 133.6 percent year on year. For the first time, auto exports exceeded the import by 7,000 units.

    Domestic auto players, such as Geely, Chery, Chang'an, Hafei, and Great Wall, began to run into the foreign market. Starting with a low price as its game point, Chinese auto makers are mainly targeting low-end markets in Asia and Africa.

    However, the exported autos only accounted for 1.5 percent of the overall output while the trade revenues represented some 1 percent of the total sale.

    "Auto exports usually account for more than 40 percent of the total output in industrial nations," Lin Yeliang, an analyst, said, "Which means that China, the world's fourth largest auto maker, has a promising future."

    The "go-out" plan might be indeed be driven by domestic overcapacity since China will produce twice as many vehicles as it needs by 2010 if the current investment frenzy in the automotive sector goes unchecked.

    Auto sales of the 6,224 auto makers grew by 7.18 percent year-on-year in the first three quarters in 2005 while the profit reduced by 39.29 percent.

    "Car sales have increased in number but they are less profitable, and it can happen in the foreign trade," Han Yuan, a manufacturing engineer said, "the key is to export autos with China's intellectual property."

    For China, export autos are mainly heavy autos while the import are mainly cars and jeeps. The price for average exported car stands 8,336 U.S. dollars as against 29,180 U.S. dollars for the average imported car, according to statistics released by the Ministry of Commerce.

    Electrically-operated cars might change the whole picture, which is China's hope to catch up with the world's advanced economies. China shipped 106 electric cars to the United States by December.

    Lagging far behind from motor vehicles powered by internal combustion engines, China is almost on a par with the world's advanced nations in developing electrically-powered cars, which include battery-powered autos and fuel cell autos.

    "Independent development, the possession of intellectual property and technological innovation, and mass production will be crucial for Chinese automobile makers to make breakthroughs," Han said. "Considering energy and the environment," he said, "electric cars are the best solution."

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