The export of Chinese autos faces the ban

　　The Annual sales amount of Chinese automobiles reached more than 50,000 units, till they are pulled from the market. Huaxi City News reports that the ups and downs of Chinese vehicles in Russian market make people consider: “Price war” hasn’t brought anticipated profits for automotive enterprises in China, also suffer gradually because of violation of “rules” in the oversea market.

　　Chinese vehicles are banned

　　Undeniably, price war has been always the effective way for Chinese companies to develop foreign market. The comparative advantages of labor, materials and other aspects let people from Chinese automobile industry once believe, only depending on low price, it will achieve sales very well. However, the defeat in Russia has hit self-assured auto companies in China very hard.

　　The experience in Russia is just a microcosm of the export of Chinese automobile in overseas. At present, several major auto export destinations, including Malaysia, have already given Chinese vehicles the ban entry in disguise. The credit and image of Chinese automotives are suffering an unprecedented crisis in the international market. It has become the question for the whole automobile industry in China to consider, how to enter the international market.

　　Currently, the Chinese exported vehicles are mainly low-end and economic autos. Same region, similar price, close product level, make Russia and other countries, regions in Asia, Africa and Latin American become the battlegrounds for automotive companies in China. Therefore, the rivals of Chinese enterprises competing with price in overseas are almost all domestic counterparts. Because the Chinese auto companies are generally small, and the amount are very large. They are lack of creativity and core competition, and the products have low added-value. To compete only the price in the oversea market, the whole Chinese car industry will be the only one to be damaged. Fight with domestic companies will also probably overshadow the image of “Made in China” as cheap products with poor quality. In fact, before the global financial crisis broke out, due to pursuing blindly the growth of market share, the export of Chinese automobiles has already showed the trend of an increase in volume and a drop in price. As the homogenization of the exported vehicles is very severe, the price wars in the overseas are spreading even more widely. Although the space of international market is increasing, the price of the exported Chinese automobiles is getting lower and lower, and the profit margin of the corporations is shrinking.

　　Price advantage is gradually losing

　　The market share of Japanese autos in the world is only about 20%. Despite of the worldwide financial crisis, the automakers in Japan possess rather higher profits. One important reason is that Japanese car companies rather let products relatively scarce in the market in order to protect the profit margin of the industry, which the Chinese automaker should pay attention to. At present, burdened by the global economic situation, the shrunk international auto market hasn’t been obviously improved. At the same time, the raising cost of our labor force, the pressure of costs which is brought up by the price’s increase of raw materials, the growing environmental demands, the appreciation of the RMB and other negative factors, are losing the price advantages of “Made in China”. From now on, the Chinese automotives will be very difficult to survive in the international market only depending on the price war.

　　It is even more concerned, because of the aggravating international competition, trade protectionism in some countries occurs. Due to the pressure of domestic manufacturing industry, it tends to legitimize and to institutionalize anti-dumping, and also build up all kinds of trade barriers. Especially the various technical barriers, which are specific unveiled to aim on the “price war” of Chinese enterprises, have already begun to trouble the Chinese auto export. Therefore, it is certainly not an accident that “Made in China” has frequently difficulties in the international market.

　　Expert Opinion: Price is not the primary method

　　The road of overseas profits becomes narrower and narrower. The Chinese auto enterprises want to “go abroad”, where is the way? The insider analyses that in the current competition in the international market, the price is not the mean method. The automakers from every country have worked on the technological concentration, quality and service of products. For this reason, the export of Chinese cars is still unable to enter Europe, North America and other high-end markets, and the influence is also limited in the developing countries and regions, including Asia, Africa and Latin America.

　　The global economic crisis has not only impacted on Chinese automobile companies, but also changed the layout of the international auto industry. For Chinese cars, opening the oversea market with the advantage of price should be only the first step. Then they shall put more efforts to improve product quality, after service and brand popularity to consolidate and to expand the existing position in the international market. China’s vehicle export enterprises insist on the strategy to “go out”, while should also work on industrial restructuring, changing mode of economic growth, enhancing innovative ability, quality and service and other aspects in order to deal with the changes of the market.

　　See original Chinese report Please click:

　　http://chengdu.auto.sohu.com/20100517/n272164127.shtml

　　(Jianfei Keke)