China plans stricter auto export rules
Beijing, January 1:
China plans stricter export rules to ensure that only big and credible auto makers take part in the nation’s push to become a major power in the global vehicle market, state media reported today. Beginning from March 1, the government will introduce a licensing system that will weed out auto makers that are too small to compete internationally, the official Xinhua news agency reported.
“There are too many exporters and the exporting business is in chaos, with problems such as cut-throat competition arising,” Xinhua reported.
A statement posted on the website of the commerce ministry announced the new moves but gave no further details. Xinhua quoted unsourced statistics showing that some 1,025 Chinese enterprises were involved in vehicle exports in 2005. Out of these, more than 600 enterprises less than 10 vehicles in the course of the entire year, while another 160 exported just one automobile each. The announcement of the new measures came as the government released trade data showing Chinese vehicle exports almost doubled last year.
China’s auto industry exported a total of 340,000 vehicles in 2006, an increase of 96 per cent from 173,000 the year before, Xinhua reported, citing the commerce ministry. “China is aiming to lift the value of its vehicle and auto parts exports to 10 per cent of the world’s total vehicle trading volume in the next 10 years,” said vice-minister of commerce Wei Jianguo, according to Xinhua.
The goal compares with auto and auto part exports that currently account for just 0.7 per cent of global trade in those product categories. Chinese autos are mainly sold to emerging markets in the Middle East, Latin America and Russia. However, many in the industry have ambitious plans for more developed markets as well.
DaimlerChrysler’s US arm said last week it was joining forces with China’s Chery Automotive to build small cars in China that will then be sold in the US and around the world. Brillia-nce China Automotive Hol-dings, one of the nation’s top auto makers, announ-ced in November that it planned to ship 158,000 cars to Europe over the next five years. It marked the biggest ever single export deal that any Chinese car manufacturer had carried out using its own brand, Brilliance China said. The urge to export is partly linked to the problem of overcapacity, resulting from years of expensive investment in new plants that has outpaced even China’s booming demand for cars, the lifestyle symbol of an emerging middle class.
China said late last month it would raise the threshold for investment in new auto projects in a bid to rein in capacity. Auto makers that wish to add new plants must prove that they have been able to sell at least 80 per cent of their annual production capacity the previous year.