Changes needed to halt declining auto exports

Reshuffle underway

A report by Deloitte and the Ministry of Commerce predicts there will be a reshuffling of Chinese carmakers in the overseas market.

As overseas competition is getting fiercer, small carmakers might withdraw or could be acquired by larger ones and that will consolidate leading positions of major Chinese automakers in those destination countries, said the report.

The report said that 1,543 Chinese carmakers sold vehicles overseas in 2012, with nearly 1,300 selling less than 100 units.

Due to their low sales, it would be difficult for them to build local networks and offer after-sales services. This situation is in turn affecting the overall image of Chinese auto brands in overseas markets, according to the report.

The report suggested that Chinese automakers should not put too much emphasis on short-term gains, which are resulting in vicious competition and sometimes price wars at the cost of quality. The report called on efforts to build a trade mechanism that would prevent such competition.

More companies are building overseas production facilities. Statistics show that exports of auto spare parts grew 6.3 percent in the first five months of 2015 year-on-year.

The report said Chinese carmakers should prepare their human resources and research and development departments as well as capital.

"By setting up overseas research centers or joining hands with multinational automakers, Chinese carmakers can come up with products that better meet the demands of local markets," said the report.

Chinese brands have long been competing in low-end segments abroad. However, the report said some automakers, like Great Wall, Chery and BYD, are endeavoring to shirk off their image of poor quality by rolling out better and more expensive products in overseas markets.