Chinese autos gear up for world market

China eyes a 40 percent annual increase in its auto and auto parts exports over the 11th Five-year Plan period (2006-2010) and expects the exports to reach 70 billion US dollars. It also promises to support exports of China-made brands and independent R&D.

Luc Glorieux, director of the B.A.A.V. (Busworld Kortrijk), made projection at Busworld Asia in Shanghai last year that export would be the main method for Chinese bus makers to participate in the global competition.

That means what Chinese auto makers are doing has attracted worldwide attention. Chinese commercial vehicle makers pioneered tapping the overseas market. Some of them, such as Yutong and King Long, have built up experience in their overseas presence and they offer quality increasingly close to European or American products.

Since 2000, China's bus exports have kept rising year by year by up to nearly 64 percent annually on average. China sold buses to 58 countries and regions in 2003 and 71 in 2004 around the world. Now buyers are from more than 170 countries and regions.

While sedans under foreign brands dominate the China market, home made brands, especially home made buses, prevail the commercial vehicle market. Leaders like Yutong and King Long have pushed the whole sector forward. Foreign investment, especially Germany-based bus makers MAN, Setra and Neoplan, gives a further spur to the technological progress of domestic buses.

Chinese bus makers, with their advantage in labor cost and market scale, have built up their competitive edge on the world market. Take Yutong as an example. It won more than 140 million US dollars worth of order for its 2,400 buses. It exports to some 30 countries and regions in America, Africa, Middle East, Russia and South Asia. Other major Chinese bus makers, including King Long and Golden Dragon, have also expanded their offshore market.

Unlike the conventional practice of "exchanging market for technology", leading bus makers like Yutong and Kong Long have independently developed their own technologies and brands, which have to some extent improved the structure of Chinese auto exports which is characterized by low market, lower prices, low profits, and low quality.

Yutong's prices are very close to those of its arch rival South Korean buses. It has China's only national technical center and first post-doctorate station. It exported not only components and buses, but also technologies and brands to Cuba. That has created the largest order in China's bus export, which has significant influence on the market and the world. King Long has been increasing its investment into research and development.

Shen Ningwu, vice secretary-general of China Association of Automobile Manufacturers, recalled Dong Feng Automobile's exports to Philippines 10 years ago, which ended up with consumers losing confidence in Chinese products due to Dong Feng's failure to provide maintenance service and auto parts supply.

After-sale service is indeed Achilles heel of Chinese auto exporters. But giants like Yutong and King Long have made difference now. Yutong, for instance, has its marketing networks in nearly 20 countries and regions and has built six parts centers in Cuba, South America, Russia, Egypt, and Dubai. A spare parts warehouse is also operational in Cuba which has bought 800 Yutong coaches.

In 2005 China exported 170,000 automobiles, soaring 120 percent over 2004. 6,433 of them were coaches. That is the first time that China has exported more autos than it has imported.

By People's Daily Online

People's Daily Online ---