Click to watch Edward Carpenter -
Click to watch Edward Carpenter -
asia resources

Need an office in Asia? Office suites, meeting rooms, virtual offices, network access

free downloads
CHINA: "Inside the Dragon: Outsourcing destinations in China" report

CHINA: "Inside the Dragon: Outsourcing destinations in China" report. 72-page report by KPMG China.

proceed to download

back to index backASIAtalk June,  2005

WTO Games: China's first quarter auto imports plunged by more than half from 2004 period

China's admission to the World Trade Organization in late 2001 was supposed to open its market wide for imported autos, but Beijing—like Tokyo and Seoul before it—seems to have figured out ways to keep that from happening.

Instead of rising, or even holding steady, first quarter auto imports fell 51.1% from a year ago, to about 25,000 units, Beijing's General Administration of Customs reported last week, according to the semi-official China Daily.

Just so, the combined import value of vehicles and parts fell 44.4% to $2.275 billion, the GAC figures showed. China Daily said industry experts attributed the decline... to the impact of State policy” and a general decline in demand. Total sales during the quarter slowed 7.7% from a year ago.

The South China Morning Post added that China Auto Industry Association figures published last week showed foreign makers are also starting to lose share generally as Chinese auto buyers move down-market. The figures, also for the first quarter, showed that the top 10 automakers, all with foreign ties, have seen their share decline about 9% over the past two years, from 80.5% in 2003, to 75.3% last year, and 71.3% in the 2005 quarter.

Ruthless Price Cutting

It's a result, SCMP said, of an increased number of models on the market, combined with ruthless price cutting.” About 45% of all cars sold in the quarter were stickered below C¥100,000 ($12,000). That's up from 24% of all cars in the 2003 quarter, and 38% of them last year.

Chery QQ

A classic of the genre, the paper observed, is Chery's QQ compact. The design, purloined from the GM Daewoo Matiz, is also sold in China as the Chevy Spark. Priced below

C¥30,000, the QQ is outselling Spark almost 10 to one (story page 5). The main factors, China Daily said, seem to have been a change in policy that segregates imports from domestic vehicles at the dealership level. Import showrooms can no longer handle domestic cars, and vice versa. Equally important, the SCMP said, are rules that limit imports to seven designated ports and oblige importers to pay all duties and taxes within 15 days of a vehicle's arrival.

Previously, the paper noted, importers could leave cars in bond for as long as a year without paying duty, giving them time to find buyers without a financial penalty. The rules drove many smalltime

im-porters out of the market,” SCMP said.

Domestic Growth

The policies were put in place to foster the growth of domestic automakers. The government is also pushing a consolidation of the fragmented domestic industry, and is encouraging makers like Chery and Geely to move into both exports and overseas production. And as a matter of fact, the SCMP noted, first quarter exports soared about 15% from a year ago, to 132,964 vehicles, according to the customs figures.

Source: Japan Automotive Digest - GAI

For a free sample copy of The Japan Automotive Digest, click here.

previous page

go top

search our site



Other articles from the same issue (June,  2005).

WTO Games: China's first quarter auto imports plunged by more than half from 2004 period
play read on

Automotive industry affected by recent guideline changes in China
play read on

Strategic management in a flat world: The imperative of best practices
play read on

India: Fringe benefit tax ("FBT") proposed
play read on

U.S. – Japan Social Security Agreement
play read on

Korea: Living conditions for foreigners to improve
play read on

China and India: The race to growth
play read on

Japan: Recovery in the automotive industry
play read on

Learn the Chinese language to strengthen China relationships
play read on

Our Free eJournals

To visit GlobalAutoExperts Directory, click here.

©2008 | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120