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Export of auto parts to the US may shrink

By Jiang Wei (chinadaily.com.cn)
Updated: 2008-12-11 17:29

China's exports of auto parts to the United States may shrink as the US government's $14 billion bailout is not enough to rescue the US Big Three automakers, analysts have said.

On Wednesday the US House of Representatives approved the loan package intended to help prevent a collapse of domestic automakers and the subsequent threat to millions of jobs. The plan is now under debate in the US Senate.

Dong Jianhua, an auto analyst with Southwest Securities, said: "GM, Chrysler and Ford have to continue developing their restructuring plans while the $14 billion loans keep them operating, which means that they are very likely to close some plants that are not profitable and that their sales may continue to drop."

As a result, Dong expects that some Chinese auto parts suppliers will see their exports to the US market decrease. However, it is also an opportunity for Chinese car manufacturers to increase their share in the US market, Dong said.