Chinese Car Exports: Game Over?
For the past years, auto makers in Europe and the U.S. looked to China with hope, and with trepidation. They hoped the booming Chinese market would lift their worldwide sales. It did. They feared the Chinese would export cars en masse, swamping Europe and the U.S. with cheap vehicles. They did not.
Weapons of mass destruction: Nevertheless, red alert was sounded each time a Chinese car appeared at an auto show in Frankfurt, Geneva, Paris, or Detroit. weapons of mass destruction were deployed to ward off a Chinese invasion: Chinese cars were crashed, and grisly results were published, sometimes coincidentally timed adjacent to those auto shows. An insider close to the matter said: “If you have a lot of money, you can crash a lot of cars. There’s always one crash that looks real horrible. That’s the one you will see on YouTube.”
Another kind of crash: This year, there were no terrifying crashes of Chinese cars before the Paris Auto Show. Instead, Edmund’s AutoObserver reported from the show: “The era of Chinese car exports may have ended before it even began.”
Only two Chinese auto companies had appeared the show. One was Brilliance, BMW’s joint venture partner in China. The other was the French distributor of Shuanghuan Automobile. In previous years, they created hysteria. This year, they created yawns.
This time, no cars needed to be crashed. What did crash, were the auto markets. Auto sales in the U.S. were down 26 percent in September. In Japan, car sales are at their lowest level in more than thirty years. European markets are faring poorly.
Chinese new car exports sink: Chinese new car export numbers confirm this trend. August 2008 saw the first monthly drop over recent years in China’s car exports, largely due to slowing demand overseas. According to the China Association of Automobile Manufacturers (CAAM), China exported 44,400 motor vehicles in August 2008, down 22.18 % from the previous month, or 11.29 % from a year earlier. Analysts think this trend will accelerate when the full impact of the market crash will be felt.
China had exported a total of 612,700 vehicles in 2007, up 78.95 % from a year before. For the first eight months of 2008, the total Chinese auto export value still rose 36.5 percent year-on-year. However, experts expect a decline for the rest of 2008, and a bloodbath in 2009.
Different story for parts: For auto parts, the picture is rosy. Sure, according to Gasgoo , Chinese parts makers who focused on delivering OEM parts to foreign new car manufacturers, saw their sales “drop significantly this year.”
Manufacturers who target the after-sales market are in much better shape, while many people prefer to maintain cars rather than buying new ones. The semi-official newspaper China Daily said: “The US and the European customers’ preference for China-made auto parts, which are more competitive in price, provides much better opportunities.
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