Filed under: International markets, Press releases, Products and services, Competitive strategy, Marketing and advertising, China
During the first 10 months of this year, China’s auto sales, including vehicles, buses and trucks, rose by 64% from the previous year to 413,500. According to a report from the Commerce Ministry, sales from exported vehicles jumped 117% year-on-year to $4.8 billion.
Despite increased automobile sales overseas, China’s revenues are falling, injured by declining car prices. The report showed that exports of passenger vehicle more than tripled, but the weak dollar made their value to rise only 174% to $948 million.
Among other things, “unhealthy competition” is blamed for this discrepancy between the export volume growth and sales. According to the official Xinhua News Agency, value of the foreign autos sold in China increased in the January-September period as passenger vehicles imports totaled only 99,500 units with a dollar value of $3.4 billion.
Looking ahead, the report estimates an increase of Chinese automakers in Europe and North America. China’s automobile exports are expected to rise to 600,000 in 2007 and to 800,000 in 2008. Some Chinese automakers also announced plans to develop new assembly plants in the Philippines or in central Mexico.
The weak dollar isn’t the only factor that could continue to lead to lower revenues for Chinese automakers. While the volume of vehicles being exported has been increasing, there are sure to be questions over the materials that are being used in these vehicles, and I would expect to see costs continue to rise as the automakers look to improve the materials being used in their automobiles.
Eliza Popescu is a financial writer for the on the web investment advisory service Investor’s Observer.
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