According to lore, China has closed off its market to foreign car importers, and is ready to flood the world with cheapmobiles.
Just the opposite is true.
China’s car exports are going nowhere. China’s car imports on the other hand caught everybody by surprise, especially the automakers that can’t bring cars fast enough to the Middle Kingdom.
Some Chinese car buyers have to wait until next year to get hold of imported autos they have ordered, reports Shanghai Daily, “ as increasing demand has led to a shortage of such vehicles.”
“Imported auto sales have been rising every year, faster than suppliers’ expectations,” said Sun Jian, a franchised dealer for Land Rover. “They have underestimated China’s potential.”
For the first seven months of this year, imported car sales rose 152 percent year on year to 450,960 units. The China Passenger Car Association, expects imports to exceed 700,000 units this year and to eclipse 1million in 2011.
Of course, there are conspiracy theorists. Some say the shortage is artificial, so that dealers can charge extra fees if buyers want the cars earlier. Which of course is baloney. No sales director is holding back sales he can book into the current period. As with China being pretty much the only growth market, they are shoveling in as many as they can. It just takes a little planning, and that can get overtaken by events.
With the voracious appetite of new cars Middle Kingdom has, one day we’ll be like post WWII in old blighty any new cars would be stamped ” for export only ”
Ve have to vait but shouldnt be as bad as the Communist days in Russia , one need to vait 10 yrs for a LADA!
On the same day your car is ready the plumber’s appointment will be the same too, quite a dilemma get the plumbing fixed or picking up the new car.
With the auto parts market being flooded over here with suspect brake rotors and other critical parts, I can ony imagine what their cars are like. Mechanics in my neck of the woods are refusing to put these parts on your car if you bring them in, If the part is OEM they will.
It would be interesting to document the tribulations to import new USA vehicles into China and all the cost adders related with those activities. Next, what is required by China law to provide and maintain service & parts. I would imagine that would give us the answer to why China customers must wait for their imported vehicle and why we see few imports except high end vehicles.
As an example, why doesn’t Ford export USA Mustangs, Taurus, Explorer, and Lincoln MKS to China to fill gaps in their product-line offerings? My guess is the artificial barriers and government pressure make it prohibitive unless the automaker prices their vehicle in the stratosphere. I am sure the China govermnent gives GM a break on some imports because they agree to other China domestic production or transfers of future technologies. Or they agree to make the vehicle at a future date in China. CTS ?
I have read that autos and auto parts are the number one component in the trade deficit with Japan despite all their electronc prowess and electronic products that we buy. China is not exporting vehicles to the USA, only auto parts. We have a tremendous opportunity here to start to reverse the trade deficit with China if we could break down all the trade barriers for auto exports to China.
Why doesn’t the Congress consult a “Bertel” for full understanding of the process and artificial barriers and hammer away on the Chinese in this arena?
Why is there VAT for China imports but not exports. It would seem we should be able to do the same, never mind talking about currency floating or a currency tariff. Is Congress a-sleep at the wheel? We know the answer to that one.
The benchmark for progress should be a USA Mustang V6 stickshift available for USD $30K to a China consumer. The boats are empty heading to China, fill em up.
The tribulations to export you car to China are pretty much the same as exporting it to Europe
1.) You submit it to CCC testing (in Europe: European Whole Vehicle Type Approval)
2.) You pay your import duty (last I looked it was 25%)
3.) You are good to go.
The importers I know are not griping about government restrictions. The are furious that they aren’t getting enough product.
Grey imported Mustangs have been spotted in Beijing.
And come on: “Why is there VAT for China imports but not exports?” Do you pay sales tax if you export your car from the U.S.? Do you pay VAT if you export it from Europe? Actually, China is one of the few countries that does selective VAT refunds for certain product categories on export.
“2.) You pay your import duty (last I looked it was 25%)”
25% import duties sound about right, and it is long past time for the US to impose them.
@John Horner,
For trucks, the 25% “chicken tax” has been in place for almost 50 years in the US. Long past time to repeal that one, I say.
The smoke and mirrors just keep on rollin’.
Bertel, please. Just give one example of a non-post-war-scenario economy that grossly grew exports with a NON-devaued currency. Just one.
While you may be able to personally cash out your 10MM USD stake, the reality remains that the ‘big players’ can’t by virtue of the exchange rate of the yuan.
Please explain to all us idiots how while the Chicoms won’t let it float on the open market, the renmibi is still a fairly valued currency.
When TTAC posts articles like this, you should take care to differentiate between “manufacturers” and “importers”… the Chinese market remains very closed to importers. Not so much if you own factories and can afford to spend billions in-country.
Bertel’s comments above about “submitting it to CCC testing” is kind of like throwing out a one-liner to describe Bill Gates’ legendary efforts to bring his 959 into the US all those years ago. CCC testing is a tedious, time-consuming, bureaucracy and red-tape laden, and above all very, very expensive affair — which must be repeated every 18 months or so, and only applies to a single model of an affected product, and is only an option for manufacturers.
It absolutely is not something that could ever support one-off “gray market” imports (if it was intended to somehow relate to the subsequent comment about the Mustang).