China becomes net vehicle exporter in 05

[HenryTo]

Chery is set to export cars here to the U.S. by 2007 - no doubt many folks will take a "wait-and-see" approach before buying a Chinese-developed car. My guess is that selling to the U.S. market will help them tremendously - not because this will boost the bottom line but because this will force/help them to improve their quality in the long-run. This will make them better compete in the Chinese domestic markets - thus making GM Chinese profits disappear as well in the coming years.
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China becomes net vehicle exporter in 05-official
Fri Feb 10, 2006 3:46 AM ET

By Fang Yan

China becomes a net vehicle exporter in 05-official

SHANGHAI, Feb 10 (Reuters) - China became a net vehicle exporter for the first time last year, an official industry association said on Friday, helped by the sale of cheap models mostly to developing markets.

The country exported 172,800 units in 2005, up 120 percent from a year earlier, with imports up a much smaller 8 percent at 161,900 units, a senior executive with the China Association of Automobile Manufacturers told Reuters.

"Most of the exports are for lower-end models, popular in developing markets," the official said.

These models tend to be made by smaller Chinese car makers, such as Chery Automobile, Geely Automobile Holdings Co. Ltd. (0175.HK: Quote, Profile, Research) and Great Wall Automobile Holdings Co. Ltd. (2333.HK: Quote, Profile, Research), which are forced to look overseas on rising domestic competition.

Great Wall is aiming to ship 30,000 to 40,000 units overseas this year after exporting 18,526 vehicles in 2005, mostly to the Middle East, Africa and Asia, a company official said on Friday.

And it plans to increase that target to 100,000 units by 2008 as it eyes a plan to build a $100 million assembly plant in Russia with annual capacity of 50,000 units, he said, joining regional rival Ssangyong Motors (003620.KS: Quote, Profile, Research) in producing sport utility vehicles there.

Chery, which already exports 10 percent of its cars, said this week it had been talking with Avtotor, a Kaliningrad plant that currently assembles vehicles for BMW AG (BMWG.DE: Quote, Profile, Research), GM and Kia Motors (000270.KS: Quote, Profile, Research), about the production of 15,000 to 20,000 Chery cars a year.

Geely has set its long-term sights on developed markets in the United States and Europe. Its exports jumped over 60 percent to 7,000 units in 2005, mostly to developing markets, it said on its Web site (www.geely.com).

Shipments overseas are expected to hit 1.33 million by 2015, accounting for two-thirds of total sales, it said.

China, once an easy profit centre providing global carmakers with double-digit margins, has become one of the industry's most intense battlegrounds.

Foreign auto makers such as General Motors Corp. (GM.N: Quote, Profile, Research), Ford Motor Co. (F.N: Quote, Profile, Research) and Volkswagen (VOWG.DE: Quote, Profile, Research) are investing $15 billion to triple capacity to over 7 million cars by 2008 -- sparking fears of an impending glut.

[rffrydr]

They already compete in China with the GM platform they stole from Korea.

"Chery" sounds an awful lot like "Chevy" in chinese!????

The biggest hurdle for them is cultural: witness their "mousetraps." Exact copies of Victor, but they still don't work. Don't get me started on the "virgin" olive oil.

The BIGGEST problem I have with the good Chinese stuff I have is with the quality of the raw materials. Steel and rubber...

But all that is changing.