China becomes net auto exporter, with Geely, Chery leading the way

BEIJING (AP) - China says it has become a net exporter of cars and trucks for the first time, with new Chinese competitors such as Geely Group and Chery Automotive starting to win market share in Asia, Africa and the Middle East. Exports jumped by 133.5 per cent in the first 10 months of this year, giving China an export surplus of 7,000 vehicles, according to the official Xinhua News Agency.

Beijing has been promoting the growth of its automakers in recent years as foreign suppliers expand in China, which is expected to become the world's biggest car market.

The report Wednesday by Xinhua didn't give detailed figures for China's auto exports.

But Michael Dunne, president of Beijing-based consulting firm Automotive Resources Asia, said China's exports in 2005 would probably reach about 125,000 units.

Some 20 to 25 per cent of that total is likely to be made up of vehicles made by Chery and Geely, two Chinese brands that sell abroad for less than $10,000 US, said Dunne.

"Chinese automobile manufacturers are facing an increasingly competitive market at home," he said. "They are high-volume producers. To compete and survive, they need to export worldwide."

Geely's two mainland Chinese auto companies - Zhejiang Geely Automobile Co. and Shanghai Maple Guorun Automobile - sold a total of 96,683 sedans in 2004, up 27 per cent from 2003.

The company says it has just over a four per cent share of China's market for passenger cars.

Chery has announced plans with American entrepreneur Malcolm Bricklin's Visionary Vehicles to market cars in the United States and says it hopes eventually to sell two million vehicles a year.

The company plans to begin offering five models in the United States starting in 2007, including a compact sedan and an SUV.

Africa, Asia and the Middle East are the main markets for Chinese exports, with Syria and Algeria the largest of all.

An exception to that trend is Ukraine, where low-priced Chinese models sell well, Dunne said.

Outside of Geely and Chery, China's 2005 exports were "bread box" vehicles - pickup truck lookalikes made by companies such as Chang An and Hafei, Dunne said. He said these vehicles have $2,000 to $4,000 price tags at home, where sales are concentrated in relatively poor areas, away from big eastern cities.

China's domestic auto sales now total about five million vehicles per year, with most foreign brands manufactured locally or assembled from imported parts.

Imported cars are primarily high-end models such as the Mercedes S-Class, the BMW 7 and the Lexus, which start at around $50,000.

© The Canadian Press, 2005