RMB appreciation: domestic enterprises exports profit dropped 10%

"Due to the fluctuation of RMB against the Yen, more than 20% profits lost." Guo Zhenfu, general manager of Zhengzhou Nissan said. In 2005, Zhengzhou Nissan’s profit was only 80 million yuan. And more directly reflect the impact of exchange rate fluctuations is the automobile manufacturers based on exports and overseas production. According to the FAW import and export company, Dinglei disclosed, some quoted prices have virtually no profit, if the RMB appreciated around 4-5%, which will be a devastating blow to the export of low-priced car. According to industry sources, after the exchange rate fluctuation for more than 10 months, the profit margin of many exported products are generally below 10%.

"After appreciation of the RMB, to Chinese auto enterprises, extensive overseas acquisition is a better approach." An auto analyst Mckinsey China said.

Professor Yang, deputy director of China Automotive Technology and Industrial R&D Center, found that RMB appreciation will not have a significant effect on exports volume in 2007, it will only affect the export profits; As long as there are profits, the expansion of car exports will still be carried on, but with the fluctuation of the exchange rate, the exports growth rate is likely to slow down and will not outpace last year's doubled digit growth.