11-12-2006 China
has created a vibrant auto industry over the past two decades, but executives
said on Sunday that a significant gap still separated local manufacturers from
the world's top brands.
"If we want to become a global automotive
giant, there is still a long road to travel," Yin Jiaxu, chairman of China
Southern Auto Holdings Corp, told a conference on Sunday.
China Southern
Auto owns 52.5 % of Changan Automobile Co. Ltd., Ford Motor Co.'s partner in China.
Foreign car makers are eager to increase their share of China's auto
market, which grew 21 % in 2005, amid slowing growth in more mature North American
and European markets.
The fast growth, however, has spurred rapid expansion
by the local ventures of the likes of General Motors Corp. and Volkswagen AG,
leading to severe price competition and plans to increase exports and fatten profit
margins.
Last month, Brilliance Automotive, BMW's China partner, became
the latest with overseas ambitions when it announced plans to export 25,000 of
its sedans to Europe next year.
Brilliance has an export target of 158,000
within five years, while Changan Auto also has plans to produce 250,000 cars in
the year 2010.
But like the Koreans and Japanese before them, the price
advantage enjoyed by Chinese exporters is offset by poor quality, outdated designs
and the lack of any brand recognition.
"For Chinese consumers there
is still a huge gap between foreign brands and local brands ," said Frank
Zhao, the vice president of Zhejiang Geely Holding Group Co..
"But
without some leadership or guidance, it will be difficult," said Zhao, referring
to the critical role of the government in nurturing the industry.
Last
month, China said it aims to lift automotive exports to $120 billion, or 10 %
of the world's total vehicle trading volume, in the next 10 years, official media
quoted the Ministry of Commerce as saying.
Last year, such exports reached
$10.9 billion, an increase of 34 % over 2004.
The mainland is the world's
second largest automotive market and one that is expanding quickly as double-digit
economic growth bolsters consumption.
China last year became a net vehicle
exporter for the first time, exporting 172,800 vehicles mostly to Africa, Southeast
Asia and the Middle East, where pricing is a decisive factor.
Other manufacturers
are looking to gain export experience by building cars with foreign partners.
Chery Automotive Co. is in talks with DaimlerChrysler to make subcompact
cars in the mainland targeting markets including the US and Europe.
Despite
the obstacles, executives were upbeat the industry was on the right track and
that eventually they would succeed.
"Just because the goal is distant
doesn't mean it's not reachable," said Southern Auto's Yin.
|
