Business

Cars made in China are expected to draw spotlight at the 10th Car Show which kicked off in Santiago on Thursday, according to an official from a Chinese automobile company in Chile.

Jose Miguel Ruiz, representative of China’s Chery automobile company, said Thursday that Chinese cars would be “stars” at the 10th Car Show.

As many as 13 Chinese patent cars are showing up at the exhibition, together with automobiles from the US, Japan and Europe, Ruiz said.

Most of the Chinese cars on sale in Chile entered the country at the beginning of this year, with the registration of amazing sales results, Ruiz added.

The exhibition, which will last until Nov. 2, covers a floor space of 77,000 square meters. Some 50 patent cars and more than 500 car models are appearing at the show, which is expected to attract about 50,000 visitors.

(Xinhua News Agency October 24, 2008)

Markets in smaller cities in China have became the top priority for domestic car makers as they battle against declining sales and weak market demand.

Chinese car makers, including Brilliance China and Tianjin FAW Xiali Automobile Co., have been extending their distribution networks to second and third-tier cities after sales growth in cosmopolitan hubs such as Shanghai and Beijing slowed.

Tianjin FAW, the manufacturer of the Chinese-branded Vizi subcompact, plans to increase dealerships in counties and rural areas by a factor of eight, giving the firm 800 dealers by 2010, according to Dang Ren, the assistant to its general manager.

The move aims to help its aggressive sales target of 400,000 units during the same period.

Another domestic player, Brilliance Jinbei Automotive Co., wants to double the number of dealers in second-tier cities to 400 by 2010, a company official said.

Major Chinese car makers including Chery Automobile Co., Geely Automotive Holdings and Great Wall Motor Corp. all reported a sales drop and profit falls this year, as the slump in stock markets and the global financial downturn drove consumers away from auto purchases.

“Chinese brands are impacted the most under the global financial crisis because the buyers of domestic brands are cost-sensitive consumers,” said Yale Zhang, analyst from CSM Asia Corp.. “Domestic brands will have a difficult time in 2009.”

Chinese auto makers also found it hard to compete with joint ventures as more small, low-priced vehicles carrying foreign brands were launched in the Chinese market.

The market share of Chinese–branded vehicles had dropped to 26 percent by the end of September, down from 30 percent at the beginning of the year, according to the China Association of Automobile Manufacturers.

In September, China’s passenger car sales dropped 1.44 percent from a year earlier to 552,800 units. It was the second month in a row that experienced a year-on-year sales decline.

(Shanghai Daily October 23, 2008)

At this time of year, China’s passenger car dealers normally bask in a warm autumn glow, with September and October being the country’s two best months for auto sales.

A man walks through a row of new cars at an automobile market in northern Beijing. China’s passenger car sales dropped 1.44 percent year-on-year to 552,800 units in September due to fuel price hike, the slowing economy and the rising vehicle purchase tax. [China Daily]

But, this year is different. The chilling winds of the global credit crisis, inflation and sinking consumer confidence are being felt on dealers’ forecourts across the land.

China’s passenger car sales fell in August from a year earlier, the first monthly decline in more than two years.

According to China Association of Automobile Manufacturers (CAAM), 451,300 cars were sold in the world’s second-largest auto market in August, down 6.24 percent year-on-year.

Earlier this month, CAAM reported that sales continued to slide in September, with the monthly figure falling 1.44 percent from a year earlier to 552,800 units.

Sales growth in the sedan segment cooled from more than 20 percent in the first quarter to 10 percent in the second quarter.

“Too many adverse factors are putting a damper on auto sales this year,” says Hui Yumei, an analyst from auto research firm Sinotrust.

“The readjusted vehicle purchase tax and higher fuel prices can be blamed for the unusual slowdown, as well as consumers delaying their purchases because of the expectation of a price cut after the Anti-Monopoly Law was implemented in August and their flagging enthusiasm in the slumping stock market,” says Hui. “The Beijing Olympics also kept potential purchasers from showrooms.”

Fuel prices rose on two occasions in the past few months, first in June by 20 percent and on October 7 by a further 4 percent in Beijing, in a bid to cut oil consumption and tackle pollution.

And, in an effort to drive more potential buyers away from huge gas-guzzlers, in September the central government hiked the sales tax on big cars, while cutting the levy on smaller vehicles, in an effort to curb fuel consumption and control emissions.

The tax on passenger vehicles with engines bigger than 4 liters was raised from 20 to 40 percent, while it was cut from 25 to 15 percent for vehicles with engines between 3 and 4 liters.

To encourage purchases of small vehicles, the tax on cars with an engine size at or less than 1 liter fell from 3 to 1 percent.

However, the government’s supposed shot in the arm for sales of smaller autos appears to be a bit of a damp squib.

In August, the market share for passenger cars with engines at or smaller than 1 liter was a mere 7.67 percent.

Jin Yibo, a spokesman for Chery Auto Group, explains that the tax adjustment only cuts the price of more fuel-efficient cars by several hundred yuan, not enough to convince customers that smaller is necessarily beautiful.

The unexpected slowdown in sales has had an obvious impact on the market.

Mazda Motor Corp last month halved its sales forecast at a Chinese venture selling compact cars, admitting it goals were too high.

According to CAAM, passenger vehicles sales in the first half of the year stood at 3.6 million units, 17.07 percent up from the same period last year.

China’s import and export value on motor vehicles and related products stood at 7.417 billion U.S. dollars in August, a decline of 3.85 percent from the previous month, according to China Association of Automobile Manufacturers (CAAM).

Continue reading ‘Trade value on motor vehicles, related products declines’ »

China sold 751,500 motor vehicles nationwide in September, representing a growth of 19.48 percent from the previous month but a decline of 2.74 percent from the same month of last year, sources with China Associations of Automobile Manufacturers (CAAM) said Saturday. Continue reading ‘Sept. auto sales recover from Aug. but still not optimistic’ »

Unlike the general slowdown of the world economy, the automobile industry in this south China city continues to maintain its robust momentum.

Continue reading ‘City’s auto industry remains robust’ »

Bosch Group, which is slowing business expectations for this year because of negative currency effects and the economic slowdown, said yesterday it would continue to increase its business and investment in China.

The German auto parts manufacturer said it remained confident in the sustained growth of the world’s second largest auto market even though global financial turmoil and economic slowdowns have prompted car makers to slash jobs and cut production in Western markets.

“The recent financial crisis has hardly affected the Chinese banks because engagement is limited,” Franz Fehrenbach, chairman of the board of management of Bosch.

“We are confident China will continue its high growth in the foreseeable future,” he said in Beijing yesterday.

Bosch had invested some 1 billion euros (US$1.36 billion) in China by 2007. Another 850 million euros will be added between 2008 and 2010 to develop energy-efficient, clean and green driving solutions.

Production in its Wuxi, Jiangsu Province, plant will be expanded from 100,000 units to 1.4 million in 2010.

(Shanghai Daily October 14, 2008)

Up to 800,000 cars were taken off Beijing roads on Monday as a new traffic restriction officially began. Traffic jams, however, were still reported in a few downtown areas, local authorities said.

Under the new restriction, 70 percent of government vehicles, as well as all corporate and private cars, will take turns off the roads one out of the five weekdays as of last Saturday, according to the Beijing Municipal Committee of Communications.

Cars whose number plates end with 1 or 6 will be taken off roads on Monday, while those ending with 2 or 7 will be banned on Tuesday, 3 or 8 on Wednesday, 4 or 9 on Thursday and 5 or 0 on Friday. The ban does not apply on weekends.

Because a weekend fell on Oct. 11 and Oct. 12, the new restriction actually started being applied on Oct. 13.

The ban is applicable within the Fifth Ring Road inclusive, from 6 a.m. to 9 p.m. for private cars and round the clock for government and corporate vehicles.

Guo Delin, a self-employed businessman, experienced smooth traffic on Monday morning while driving on the Second Ring Road. But he was still unhappy with the restriction.

“I’m traveling in most of the working hours, so driving is part of my life. I’m afraid the ban will affect my business.”

Late last month, more than 400,000 Beijingers joined an online discussion about whether to keep the ban. Nearly half supported a permanent vehicle restriction, while others, mostly car owners, opposed.

Despite the reduction of traffic flow on Monday, some major roads in downtown areas were still jammed during the morning and evening rush hours.

“We cannot expect the new measure will produce good results instantly. It will be a long-term task to improve the traffic condition, and we need to take more effective measures,” a Beijing Municipal Traffic Management Bureau official said.

The new restriction will be implemented on a trial basis for six months until April 10, but does not apply to police vehicles, ambulances, fire engines, buses, taxis and other public service vehicles.

The ban, among other measures, was imposed to help sustain the hard-won smooth traffic and good air quality during the recent Olympic Games. As of Oct. 1, 30 percent of government vehicles had been taken off the road.

Alongside the traffic bans, city authorities have also encouraged employers to adopt more elastic working hours — even to work at home, if possible — to ease congestion.

Downtown department stores have been advised to open at 10 a.m. instead of 9 a.m., as of Oct. 11 and close one hour later than before.

The new traffic restriction is expected to take some 800,000 cars off the road daily and reduce the capital’s average road traffic flow by 6.5 percent and speed up traffic within the Fifth Ring by 8 percent at least, according to the Beijing Municipal Committee of Communications.

Zhou Zhengyu, the committee’s deputy head, said traffic authorities would improve public transport service after the new restriction was implemented. This included extending the operating hours of buses and subway trains, increasing their numbers and building more subway lines.

“Currently, Beijing has 200-km subway lines. The length will be raised to 300 km by 2010, and to 561 km by 2015,” he said.

The latest government statistics shows Beijing has about 3.5 million vehicles. In addition, about 1,200 new vehicles take the road each day.

During the Olympics and Paralympics, Beijing imposed a two-month ban on vehicles on alternate days, something which took nearly 2 million cars off the roads. Traffic flow within the Fifth Ring was reduced by an average 21.2 percent and the average speed at rush hours increased by 25.8 percent to 30.2 km per hour, according to the Beijing Municipal Committee of Communications.

The Olympic traffic ban helped reduce almost 120,000 tons of pollutants emitted by vehicles, or about 63 percent of the total vehicular pollutant emissions before the ban.

The city returned to its normal congestion after the ban was lifted on Sept. 21.

(Xinhua News Agency October 14, 2008)

The Noble subcompact car, which the Shuanghuan Auto-mobile Co is scrambling to export to Europe, has been awarded the lowest rating ever given out in a Chinese crash test.

The China Automotive Technology and Research Center, the nation’s official vehicle laboratory, gave two stars to Shuanghuan’s Noble. This compared to the five-star rating achieved by Lavida, made by Shanghai Volkswagen, and the Yaris compact, made by Guangzhou Toyota. All three cars were reviewed in the same batch of tests.

Analysts said the results will make it more difficult for Shuang-huan to tap European markets, which usually require a higher safety standard.

“Whether Noble will pass the crash test in Europe is more questionable and depends on further improvement,” said Jia Xinguang, the former chief analyst with the China National Automotive Industry Consulting and Development Corp.

Shuanghuan earlier said the Noble would enter European markets such as Italy and Greece next spring. It already sells the Noble in Southeast Asia and Africa. Monthly sales in Thailand are approaching 1,000 units.

Zhang Rui, communications officer of Shuanghuan, yesterday said the Noble has yet to be granted import approval by Europe and the car maker is improving product safety before taking the European crash test.

“Our determination to export our small cars to Europe and the US market remains unchanged,” Zhang said.

The Noble is also likely to face a court battle in Europe because it has been accused of copying the design of Mercedes-Benz’s Smart Fortwo.

(Shanghai Daily October 10, 2008)

Volkswagen AG yesterday said its sales in China slowed for the first three quarters of this year as the global economic meltdown and rising fuel prices tamed market demand.

Europe’s largest car maker sold 772,783 vehicles, both imported and locally made, in China for the first nine months of this year, an increase of 13.1 percent, according to a company statement.

This compared to a 23.3-percent sales increase for the first half of this year and 28 percent last year.

Sales of Volkswagen-branded vehicles rose 7.5 percent to 637,857 units from January to September.

Its luxury car unit Audi sold 89,715 units, an increase of 19.2 percent, while sales of Skoda vehicles more than doubled to 44,829 after it launched the Chinese-made Octavia sedan.

Volkswagen joins overseas car makers such as General Motors and Toyota, which are experiencing slower sales growth in China, as inflation hit a 12-year high, dampening demand.

“China’s auto market developed at a slower pace this year under the combined impact of the global economic slowdown, financial turmoil, higher fuel prices and natural disasters,” said Winfried Vahland, president of Volkswagen Group China.

“But we managed to continue our steady growth, boosted by new models and upgraded services.”

Domestic car makers sold a combined 629,000 vehicles last month, a decrease of 6.34 percent from a year earlier.

(Shanghai Daily October 10, 2008)