Remember how everybody was scared by cheap Chinese car imports? It’s not happening. Leading executives of Chinese car companies have pretty much given up hope for major car exports in the near future. Instead of exporting cars, China’s auto makers should think about exporting technology and capital to get into foreign markets, said Xu Heyi, chairman of BAIC to China Daily. “This is an inevitable change for Chinese auto makers who want to go global,” Xu said. “Products export is a short-sighted behavior.”
That behavior clearly has been without merit so far. According to data published by the China Auto Manufacturers Association CAAM, China exported 297,100 units in the first five months of 2011. That is about 3 percent of total production. And an embarrassment for the export powerhouse China. China imports more cars than it exports. I the meantime, China can console itself with the fact that it exports 70 percent of the world’s sex toys.
Instead of exporting, BAIC is looking towards investments into foreign markets. BAIC announced Tuesday the establishment of a joint venture with Russia’s AMS Auto. It is the first joint venture formed by Chinese and Russian auto makers since the global financial crisis.
After China and India, Russia is the fastest-growing auto market in the world and is expected to become the largest new vehicle market in Europe this year.
Even that joint venture won’t flood Russia with Chinese cars. It is about trucks. BAIC has entered a joint venture to produce light, medium and heavy cargo trucks to be sold under the BAW brand in Russia.
I guess even they realized their products are nowhere near ready for the e world market and now the race is on to improve the technology at any cost, be it industrial espionage or buying every one out, they have not give up on dominating the world’s vehicle market.
yah, how can China export technology it mostly borrowed (stole)?
Make it better like what Japan did?
I’d say they’re no different than the Japanese and Koreans before them who reverse-engineered foreign cars and gained the fundamentals for building their own cars.
you will find that the vast majority of the cars and light trucks china exports are copies, licensed or otherwise, of fairly dated japanese vehicles to places where driving the latest isn’t such a priority… witness libyan technicals or the move into south america or africa
chinese vehicles in more sophisticated markets like australia have not fared so well
It seems to me that while export has a place, since the days of Henry Ford and before him Isaac Singer, ultimately you either open up offshore factories to serve your foreign markets or you buy companies local to your foreign markets. Japanese, Korean and German car companies all have plants here in the US. It appears that the Chinese and the Indians are going the acquisition route.
The commerial for Great Wall X240 I saw on television last night and the Chery J1 I can buy at the admittedly few dealers says otherwise.
I do not think any Chinese manufacturer is serious about breaking into foreign markets, because China is the world’s largest auto market for the foreseeable future. This is entirely different from Japan and Korean car makers, who must export because the domestic markets are not large enough.
That is a reasonable short term assessment but eventually they will see a void they can fill.
China has massive demand for their own manufacturered goods but like the above article says, they have 70% of the world’s sex toys and possibly more than that of the world’s PC and laptop components.
Eventually they will get bored of servicing their own market and look to America, the EU etc. etc.
The Germans and Japanese built export markets for cars because they generate substantial foreign cash inflows and high-wage employment.
In time, the Chinese will want the same thing. Right now, the need isn’t pressing for them, given their ability to generate massive trade surpluses with lower value goods. But as their wage rates increase and reduce their wage competitiveness, it will be in their best interest to create jobs that create value-added products that can be sold abroad even as wage rates at home are increasing.
They take the long view, and I wouldn’t count them out. Give them a few decades, and things will start to look different. The path that they’ll use is unclear, but somehow, they’re going to be on it.
I’d say give it another 5, MAYBE 10 years tops. Chinese companies are importing engineers and employees from other auto companies like no one’s business. Their own domestic market is so gigantic that they don’t need to worry about exporting for now. Domestic manufacturers in Japan, America, and Europe can start sweating in their boots when they start seeing words such as “market saturation” appear in Chinese auto market analyst reports.
By “exporting capital” I suppose he means buying foreign companies, which makes sense. However, what does he mean by “exporting technology”? Stick shifts with integrated sex toys? Nuclear-powered Wankel engines?