The plan of Great Wall Motor Co. and Chery Automobile Co., two of China’s largest auto exporters, to expand into the U.S. and Europe is being threatened by a recall in Australia and the rising competition in their home market. The recall in Australia involves potential cancer-producing asbestos components. Industry researcher Dunne & Co. said that Australia is set to be the "testing area" for Chinese automakers that want to enter larger markets.
About 23,000 of their vehicles were recalled in Australia after authorities detected asbestos in certain models. Michael Dunne, the head of Dunne & Co, said that this is a major setback for the individual companies and development of the industry. Products are built in China and so the use of asbestos had raised concerns about their health and safety.
China, which has been troubled by frequent health scares, has been found to sell increased excessive lead found in toys, melamine-tainted milk and pet food killing children and dogs. The official trade chamber said that exports from the country could increase by 50% and that exports from the country could increase by about 50% this year, extending record shipments in 2011.
The shares of these companies have declined because of the discovery. The company has been banned in 55 nations because of the fiber's links to cancer and respiratory illnesses. This will undermines the nation's carmakers in their push to roll out their brands in overseas markets.