Growing pains set to entice Chinese into exports

AT LEAST one Chinese motor company is looking west to help meet its sales targets with exports because it suspects ballooning domestic sales will be curbed by the Chinese government worried about the consequences of unfettered growth.

Already the world’s biggest motor market with total sales of 13.7 million vehicles last year, the Chinese industry expects sales to top 17 million units this year.

Unless checked, that growth is expected to continue uninterrupted at the rate of about 20 per cent for the next several years, driving annual sales beyond 30 million in as little as five years as more Chinese consumers hit the highway.

By 2020, Chinese vehicle sales are expected to top 37 million – more than the United States and Europe combined.

China now has about 170 million motor vehicles – 25 times more than it had in 1980 – pumping out 51 million tones of exhaust emissions a year, according to China’s environmental protection ministry.

Left: A JAC car dealership in China. Below: A JAC truck at work in China.

The official pollution watchdog said 30 per cent of China’s 113 biggest cities failed to meet the national clean air standard, with some suffering hazy weather on 200 days in 2009.

Motor company executives at major Chinese motor company, JAC (Jianghuai Automobile Company), suspect the Chinese government will act to curb the growth in vehicle volumes to a more sustainable level.

Speaking to Australian journalists at JAC’s headquarters in Hefei, central China, JAC executive and company party secretary Zheng Wu said the Chinese market was growing rapidly and that growth was expected to continue over the next several years.

“Due to some limitations on the growth of the market, for instance, not enough parking space, too crowded roads and energy supply problems – all those kind of problems – we believe the China government will do something to contain the development of this auto market,” he said.

Mr Wu said JAC – China’s biggest light-duty truck maker and a top ten Chinese vehicle manufacturer – was itself growing rapidly, at more than 40 per cent this year, to about 470,000 units.

He said JAC planned to grow that volume to 1.5 million vehicles by 2015, but to achieve that figure, 20 per cent of the volume (300,000) would have to be sold in export markets.

“In order to achieve this 300,000 units of annual export vehicles by 2015, 30 per cent of this volume will come from commercial vehicles and 70 per cent will come from passenger vehicles,” he said.

JAC expects to export about 22,000 vehicles this year, mainly light duty trucks to emerging markets across Asia, South America and Africa.

Truck exports to Australia and New Zealand will start in 2011 through independent importer White Motor Corporation (WMC).

Ultimately, JAC light vehicles – cars, SUVs, people-movers and pick-ups – are also expected to arrive in Australian showrooms through a separate distribution arrangement.