Low price is no longer influential as

　　After momentary glory, Chinese auto enterprises suffered heavy losses in Russian car market in 2009, and are even faced with danger of exiting from Russian car market. Once low price was powerful, however, now it couldn’t respond to changes of overseas market effectively. Currently, faced with brutal overseas competition, Chinese auto enterprises should focus on product quality while pursing higher share in global market. Heavy losses in Russia for Chinese auto enterprises indicate that quality is the life and service is the competitiveness for auto enterprises.

　　Russia once was the largest car exporter of China, with a peak of nearly 57000 units exported to Russia in 2007. However, starting from the end of 2008, China's auto export situation began to nosedive and share in Russian market began rapidly declining even slid into bottom in 2009. Entire vehicles exported to Russia in 2009 actually were only a few hundred. In other words, Chinese auto enterprises are exiting from Russia together.

　　Why Chinese auto enterprises suffered heavy losses in Russia? According to industry people slump of China's car sales in Russia mainly caused by Russian domestic economic environment and policy adjustment. Impacted by the financial crisis, Russian banks were lack of liquidity and so raised car loans interest rate substantially, which led to a big drop in total volume of car loans. In 2008, Russian banks even stopped the car loans, and directly led to a 25% to 30% drop in car sales of Russian car market.

　　But more importantly, Russia continued to increase tariffs which brought a fatal blow to China's car exports. Statistical data show that the average tariff on imported goods in Russian market is 10.5%, but tariff on imported cars reached 30%. Yan Jiangbin, director at Machinery and Electronics Industries Management Office of Xinjiang Uygur Autonomous Region said that this means that price advantage of Chinese auto enterprises has vanished in the Russian market. .

　　"Exporting entire vehicle to Russia is not profitable now”, said a car export enterprise in Xinjiang when interviewed. After Russia substantially raised tariff on imported cars, prices of Chinese cars are close to cars made by auto giants such as Ford and Volkswagen.

　　In recent years, under circumstance of appreciating RMB and continuously depreciating ruble, price competitiveness of Chinese cars sharply declined and it is a fatal blow to Chinese auto enterprises that rely largely on price advantage. In addition, because Korean won depreciated 56% same level Korean cars in Russian market compared with Chinese cars are also imposing price pressure on Chinese cars. (Translator: Qinghua Wade)

　　See original Chinese report Please click:

　　http://auto.sohu.com/20100514/n272112492.shtml