China's auto import not promising in 2009

Shanghai, December 10 (Gasgoo.com) Influenced by the persistent global financial crisis and increasingly fierce domestic competition, China's imported auto market hold little promise of growth in 2009, said an industry executive recently.

The imported car market of China has delivered good performance this year. In the first ten months, China imported 340,000 cars, up 38.43% year on year, with all monthly import volumes higher than one year earlier. But since the beginning of September when the global financial crisis broke out and the Chinese government began to raise the sales taxes on big-engine cars, China's auto imports have decreased considerably.

In a recent interview by the Economic Information Daily, Ding Hongxiang, president of China Trading Center for Automobile Import, said that China's full-year car imports in 2008 will likely hit 390,000 units, a rise of 25% over last year. But looking to the imported car market in 2009, Ding forecasted that the auto imports in the coming year will probably stay at the level of this year, with growth almost impossible to come by.

Ding said the judgment is based on various global and national factors, such as the persistent financial crisis, policy climate, exchange rate fluctuations, and market demand.

At first, the market demand is closely related to the economic development. "When the global financial crisis is pervading further into every corner of the world economies, China's economic growth will continue to slow down in 2009, which will hold little hope of growth in the auto market," Ding noted.

According to his analysis, if the fourth quarter's downturn in the Chinese auto market carries further over into next year, the imported car market in China will post zero growth in 2009; if the central and local governments introduce more incentive policies and their stimulus investment can be fulfilled, the whole imported car market is likely to post some slight growth.

Secondly, a series of policies related to the auto industry are expected to become more effective. This may lead to the restructuring of the imported car market. "The sales tax, fuel tax and other policies will combine to diversify the imported auto products next year, and small-car models of low emissions will be more welcome in the market," said Ding.

The foreign exchange rate is the third major factor that will affect the auto imports. Ding noted that the value of Chinese currency RMB (yuan, CNY) against the U.S. dollar has risen since July, with a slight fall over the past few days. The exchange rates with the euro and Japanese yen have changed drastically. All this will certainly affect the exchange rate costs and even competitiveness of cars imported from different countries.