Domestic slowdown force Chinese automakers to sell their products overseas

Article by Christian Andrei, on May 14, 2012

The Chinese auto industry no longer has 30-50% annual increases as its economy slows down but as its automakers have already ramped up their capacity, they now have to sell their products overseas. So far, they have landed in Egypt, Ukraine, and Indonesia among other distant countries. As Western markets continue to be impenetrable, China's domestic automakers are making sure that their exports have no frills but have acceptable quality. This is the same strategy that they have used in China. Domestic automakers won’t be able to survive if they depend just on the market in China.

Xing Wenlin, Great Wall Motor vice president in charge of overseas markets, said that one solution to the automakers’ mounting capacity is by exporting them. The foremost cars being exported are the cheap cars such as the Great Wall Haval sport-utility vehicle models and a minicar named the Panda. These are the same inexpensive cars that are selling very quickly in China as its emerging middle class is hoping to finally drive their own car.

Priced at about 40,000 yuan ($6,300), these cars have features that may not be acceptable for the U.S. and Europe customers. However, its customers in various emerging markets worldwide would consider them sufficient. Some markets in Western countries such as in Italy and Australia are beginning to take notice of these no-frills cars. Zhejiang Geely Holding Group Co., a Hangzhou-based auto maker that bought Sweden's Volvo in 2010, is working to take advantage of the appeal of cars like the Panda. To push further, Geely is working to get advanced technology from Volvo to enhance their cars and make them distinctive.

Topics: china

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