BIZCHINA> Auto Industry in China
Market maneuvers in China's auto industry
(China Daily)
Updated: 2006-11-20 16:20

7. Export push

China on August 16 named eight cities as national exporting bases of automobiles and spare parts. These cities include Changchun in Jilin Province, Shanghai, Tianjin and Chongqing Municipalities, Wuhan in Hubei Province, Xiamen in Fujian Province, Wuhu in Anhui Province and Taizhou in Zhejiang Province. The nation also named 160 producers from these cities as national automobile and spare part exporting enterprises.

Regulators said they will give these automakers favourable policies to further boost exports later this year or next year. According to a five-year plan formed by the government, China's exports of vehicles and spare parts will reach an estimated US$70 billion a year by 2010, up from US$19.7 billion last year.

In the first three quarters of this year, China's exports of vehicles and spare parts was valued at US$20.51 billion, surging 45.37 per cent from a year ago.

8. Hyundai JV sued

Beijing Hyundai, the Sino-Korean car joint venture, was sued on August 8 by 100 buyers of its Accent Subcompact car for alleged price fraud. The trial started on October 18 in Beijing.

The firm on March 16 launched three versions of the 1.4-litre Accent, retailing at 79,800 yuan (US$10,100), 87,800 yuan (US$11,100) and 102,800 yuan (US$13,000). A top executive of the firm said in an interview with a popular Chinese Internet portal that the prices of the Accent would not change "for at least two-and-a-half years."

However, it cut prices of two versions of the Accent by 8,000 yuan (US$1,000) on July 7, less than four months after its no-markdown promise. The 100 Accent owners demanded 8,000 yuan (US$1,000) each in compensation as well as a public apology from Beijing Hyundai. The lawsuit demonstrated that Chinese customers are sensitive to car prices.

9. VW sales boom again

German carmaker Volkswagen regained sales growth in China this year after consecutive tumbles over the past two years. The company sold 524,558 cars from January to September this year, up 28.7 per cent from last year.

The strong sales keep Volkswagen as the biggest player in China's passenger car market. Volkswagen controlled 17.5 per cent of the market. The group has been leading in the Chinese car market since the middle of the 1980s when it started to produce cars at a venture with SAIC.


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