China's car exports zooms 28% in first half

China became the world's largest automobile producer and market in 2009 with annual sales of nearly 14 million vehicles.

Beijing: China, the world's top automaker, has exported 487,900 cars during the first half of this year, registering an impressive growth of 28 percent despite a weak global economy and sluggish sales.

Statistics released by the China Association of Automobile Manufacturers (CAAM) showed that China exported 487,900 cars during January-June, up by 28 percent year-on- year, the state-run Xinhua news agency reported.

China became the world's largest automobile producer and market in 2009 with annual sales of nearly 14 million vehicles.

Though China's share has grown in the global market, Chinese automakers still face grave challenges in going global, experts said.

Many industrial insiders said that the appreciation of China's currency and the rising cost of labour and materials have dulled the competitive edge of Chinese auto brands.

Additionally, Chinese companies are plagued by a lack of a clear overseas development strategy, an advanced operational philosophy and the ability to conduct significant research and development, the state media quoted experts as saying.

A senior official at one of China's top automaker, the Geely Group said his company is ready to expand its European market.

Huang Haitao, deputy general manager of sales at Geely said the company's exports during the first half were double those of the same period last year, adding that it exported more than 6,500 cars in May and over 10,000 units in June.

In the Russian market, the Chongqing-based LIFAN Group sold 4,545 cars during the first quarter, up by 69 percent from the same period last year; Chery Automobile's exports during the period were 2.5 times that of last year and Geely's exports were 3.65 times, according to the Association of European Business.

Xing Wenlin, vice president of Great Wall Motor (GWM), said his company has been exporting cars to countries like Russia, Australia, Italy, and Chile.

GWM's exports to Russia hit 20,000 units last year, about 25 percent of the company's total exports. The company exported 9,000 units to Russia during the first five months of the year, a growth of 32 percent year on year.

Russia has long been an important part of GWM's overseas strategy. The company opened an assembly plant in Bulgaria in February and it aims to further expand its European market with the help of the plant.

Meanwhile, China's automobile sales hit 9.6 million units in the first half of 2012, up 2.93 percent year on year, data released by CAAM on Wednesday showed.

Auto output during the period hit 9.53 million units, up 4.08 percent year on year, it said.

Sales of passenger vehicles in China reached 7.61 million units, up 7.1 percent, while production totalled 7.6 million units, up 7.9 percent. Sales and output of sports utility vehicles saw the fastest growth, surging more than 30 percent year on year.

However, sales of commercial vehicles slid 10.4 percent to 1.98 million units, while commercial vehicle output declined 8.6 percent to 1.93 million units.

China's automobile industry boomed in 2009 and 2010. The nation overtook the United States to become the world's largest auto market in terms of sales in 2009.

Sales continued to surge in 2010, jumping more than 32 percent to 18.06 million units. However, growth became more moderate last year, with a slowing economy and the expiration of policy incentives for car purchases.

The CAAM said auto output and sales are not likely to rebound sharply in the short-term, as the Chinese economy still faces downward pressure.

The top 10 auto producers sold 8.45 million vehicles in the first half of 2012, up 4.5 percent. Their sales accounted for 88 percent of total sales, up 1.4 percentage points year on year, the data showed.

The nation's vehicle exports in the first half year surged 28 percent to 487,900 units, the data showed.

The Chinese government, spooked by deteriorating economic data, shifted its priority from cooling inflation to reversing the economic downturn late last year, ratcheting up investment in clean energy and relaxing lending with interest rate cuts.

Meanwhile, CAAM has predicted that car sales in China may grow by 5 to 8 percent this year, at least double the growth witnessed in 2011.

Auto industry growth in China has been primarily driven by rising domestic demand stemming from rising incomes, a growing middle class, and by supportive industry policies from the Chinese government.

China's auto industry has been gradually reversing its downturn and mitigating the effects caused by the exit of the stimulus package, said Yao Jie, deputy general secretary of CAAM.

The country's three biggest cities have all imposed limits on car purchases, with Guangzhou capping annual issuances of license plates earlier this month following similar schemes in Beijing and Shanghai.

The Guangzhou municipal government announced it will allow a total of 120,000 small- and medium-sized passenger cars to be registered annually. Fifty percent of the new plates will be given out through auctions, while the others will be allocated through lotteries.