Technical barriers hit the soft underbelly

　　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.

　　Some industry people said the financial crisis and high tariff on imported cars is just the fuse. Without these factors, Chinese car will exit from Russia sooner or later. In Yan Jiangbin’s opinion, Russian market is the largest car exporter for China, but reason for ranking dropped to 20th can be attributed to Chinese auto enterprises themselves. Product quality of Chinese auto enterprises is not high and auto enterprises can’t supply repair, maintenance and parts replacement of the exported cars timely.

　　Thanks to unsatisfactory auto parts supply and product repair after cars massively exported to Russian market, overseas after-sale services actually emerged a vacuum. As a result, local consumers gradually lost confidence to Chinese brands. Export model which only emphasizes sales but ignores importance of after-sales service is not only lack of long-term strategic vision but also has negative impact on later entrants.

　　According to some Chinese businessman living in Russia, once there is something wrong with Chinese cars purchased by Russian consumers, it take Russian consumers several weeks even several months to repair. However, to repair cars imported from Western countries doesn’t cost so much time when they need repair. Under such circumstance all technology barriers for imported cars set by Russian government directly hit the soft underbelly of Chinese car.

　　In July 2008, Russian government officially implemented the revised imported car certification system, and removed the simplified procedures of cars quality control made by non Geneva Agreement countries, which made China the most affected countries. Prior to that, Chinese car products only need pass 11 tests before exported to Russia, but under the new rules that number increased to 55.

　　On October 19, 2008 Russia issued decree 745. Degree 745 ruled that to impose a 15% tariff on vehicle spare part calculated by body value of imported cars from November 2008, and tariff on each vehicle body should not less than ?5,000. Russian government raised threshold for imported cars following increasing vehicle quality inspection items. The second raising the threshold of auto imports not only limits half spare parts assembly of foreign carmakers in Russia but also makes the Chinese auto parts exports worse, and the already weak after-sale services system loses effective protection. Therefore, many Russian consumers began losing interest in the Chinese car. In addition, from January 1, 2008 Russia implemented Euro Ⅲ emission standard on imported cars so that excluded a great number of Chinese cars. (Translator: Qinghua Wade)

　　See original Chinese report Please click:

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