TPT September 2012

Global Marketplace

Already pouring billions into new factories, Chinese automakers say they are preparing to escalate their exports to developing countries. The prevailing optimism seems justified. A 43-year-old shopper in Santiago, Chile, was looking to buy a new car after having owned several used ones. Against the advice of her mechanic, she chose a Chery S21 over more established (and more expensive) models from Japanese, European and American companies. “The price factor is fairly decisive,” she told Mr Bradsher. “I paid $5,500 new and [fully equipped]. Toyota with similar features costs around $12,000.” From the sellers’ side, Steven Wang, the deputy general manager for exports at Great Wall Motors Co, made the point that the importing countries “are easy for us to operate in.” In contrast, he said, Europe has “lots of laws for new entrants,” as well as a customer base that tends to be loyal to familiar brands. › Annual auto sales in developing countries other than China have risen by 45 per cent since 2005, to 21.3 million cars and light trucks last year, according to the global data company LMC Automotive. Including China, emerging markets passed industrialised countries in 2010 for the first time in the number of cars and light trucks sold. Even so, because sticker prices tend to be considerably higher in industrialised countries that is still the more lucrative market. But Michael Manley, the head of Chrysler’s

Chinese motor exports are surging ahead

international operations, pointed out that, with so much growth in developing countries, “You have to be incredibly aware of the domestic brands” emerging in China. › The Times ’s Mr Bradsher concurs that the Chinese auto makers pose a potential challenge for the overseas divisions of companies like General Motors, Ford, Toyota, Volkswagen and Fiat – all of which are looking to emerging markets for growth and watching the Chinese contenders with varying levels of concern. To what lengths might that concern lead them? Mr Bradsher wrote, “Western automakers have been buying a wide range of Chinese cars and then having engineers dismantle them to study the quality and likely cost of major components.”

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September 2012