Automakers say unlikely to meet '08 export targets

Shanghai. October 21 (Gasgoo.com) The recent financial turmoil and economic slowdown in the global markets have made it hard for Chinese automakers to meet their export target this year, Chinese media the Economic Information Daily reported today.

"Given the current market conditions we can export 60,000 vehicles at most this year," said Great Wall spokesman Shang Yugui, citing credit crunch and high materials prices as the contributory factors. The automaker initially planned to export 70,000 vehicles this year.

Jin Gebo, top aide to Chery's general manager, also said it would be very difficult to meet this year's export target as a stronger yuan and other factors drag profits down.

In the commercial vehicle sector, FAW said its export to Russia, a major destination of Chinese auto exports, was suspended because of market entrance permission issues. Exports by Dongfeng and Sinotruck were also affected by similar factors.

To make things worse, the Russian government said it will start implementing a new policy on November 14 to levy a 15% tariff on auto-making knock-down (KD) parts as an imported vehicle body.

As many automakers in China export their products in the form of knock-down parts to Russia, this new policy will deal a heavy blow to the Chinese car companies. This tariff policy will be carried out for a nine-month trial period. At the 15% rate, up to 5,000 euros ($6,700) has to be paid as tariff on an imported car body.