China auto exports forecast to soar, but prices lag

SHANGHAI -- China's auto exports soared in the first 10 months of the year, according to Commerce Ministry figures. But revenues from passenger car sales overseas are lagging due to falling prices, reports said Wednesday.

China exported a total of 413,500 complete finished vehicles _ including cars, buses and trucks _ in the first 10 months of the year, up 64 percent over the same period of 2006.

Exported vehicle sales totaled US$4.8 billion, an increase of 117 percent year-on-year, the Commerce Ministry said in a report on its Web site.

The bulk of Chinese auto exports go to developing nations in Asia, Africa and the Mideast.

Passenger cars exports more than tripled, though their dollar value rose only 174 percent from the same period a year earlier, the report said. It gave no dollar or export volume figures, only the rate of increase.

The report attributed the discrepancy between the increase in export volume and sales to "unhealthy competition" in the passenger car industry. Among other things, nearly 60 percent of the 1,242 companies exporting vehicles had overseas sales of less than 10 units apiece, it said.

Such trends spell trouble for China's "brand image," since small manufacturers cannot guarantee adequate after-sales service and parts distribution, the report noted.

China's vehicle exports are still dominated by sales of commercial vehicles, buses and trucks, with passenger cars accounting for only US$694 million, or about 14 percent of the total.

The report forecast that China's vehicle exports could hit 600,000 in 2007 and rise to 800,000 in 2008.