Shanghai January 6 (Gasgoo.com) The Beijing municipal government’s sharply limiting vehicle registration to ease traffic chaos may cause a chain reaction that other Chinese cities will adopt regulatory measures including restriction on vehicle purchase, and pose a huge challenge to China’s automotive industry which is now facing great pressure as overcapacity increases. Rapid expansion of production capacity will force the domestic automakers to speed up the internationalization process, Zhi Luxun, Director of the Department of Mechanic, Electronic and Hi-Tech Industry, and the Ministry of Commerce said at a recent seminar on the development of China's passenger car industry.
The export share of China automobiles and auto parts is still very small at present, only three percent, while that of computers and other products has reached 60 percent, ranking first in the world, so it is a must to accelerate the internationalization process, China Youth Daily reported Thursday, citing Zhi Luxun.
In Germany, a country with large production capacity, 60-70 percent of locally produced automobiles are exported every year; In Japan, the proportion is even higher, 70-80 percent. While China has the world’s largest automobile sales of 18 million units per year; its export volume is, however, extremely low. In light of the environmental changes in domestic consumption, it is difficult to continue the low cost contend, Zhi said.
China’s manufacturing industry, including the automotive industry, has been competing by way of low costs and scale expansion, while this priority will finally be abandoned, he said, adding that they have conducted nationwide investigations which show that labor costs within the country have risen 5-10 percent, and the proportion in certain industry has even exceeded 15 percent, plus various value-added factors like rising material costs and the dollar depreciation.
Moreover, he pointed out that the technical barriers remain a major impediment to international trade, and has already extended from developed countries to developing countries, from a single country to multiple countries, from some simple tariff measures to technical obstacles, and from low-end products to high-end products. This is also a significant factor hindering the country’s exports.
Starting 2001, China’s auto export industry has gone through three phases.
* The 2001-2008 period witnessed a rapid growth of the exports of completely built vehicles, with the average annual growth of nearly 60 percent.
* The 2008-2009 period saw a big drop in auto exports. Influenced by the global financial crisis, China’s auto exports experienced 15 consecutive months of negative growth.
* China’s auto export industry has shown signs of recovery since 2010.
The Department of Commerce (DOC) earlier issued “proposals regarding the promotion of the sustainable development of automotive products”, which provided outline of the international development of the Chinese automobiles, mainly divided into three stages.
* During the 2009 to 2012 period, China will see annual growth of 10 percent in auto exports.
* From 2012 to 2015, the country's auto exports will spearhead with an annual growth rate of 15-20 percent.
* During the five years from 2015 to 2020, China expects its auto exports to occupy around 10 percent of the global automotive trade volume.
Well aware that without the marketing network and brands, a company could barely survive in the long run, the DOC will encourage several major auto manufacturers to carry out pilot programs to establish overseas marketing network this year, and will further regulate the country's export procedures, Zhi said.
