| The demand for automobiles from China
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| | The document says China auto export
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| will remain robust in 2007 and beyond,
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| | industry produces mostly duplicated
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| but overcapacity, a chaotic export system
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| | products targeting low end to mid range
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| and falling profitability will continue
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| | markets.
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| to plague the industry, the State
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| | The document says China will lose its
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| Information Center said in a document on
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| | competitive edge in car exports because
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| domestic and global economic development
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| | of rising production costs. And the
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| in 2007.
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| | price-slashing tactic generally adopted
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| The document says overcapacity remains
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| | by Chinese car exporters will damage the
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| the biggest headache for the China car
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| | international image of made in China
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| industry. In 2006, the National
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| | cars, as some companies cannot provide
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| Development and Reform Commission, China
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| | after-sale service when products are sold
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| top economic planner, began to list
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| | at such low prices.
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| car-making as an overcapacity sector.
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| | Though China car makers reaped big
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| That year most firms became caught up in
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| | profits in 2006, the trend is not
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| price wars as inventory kept rising.
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| | sustainable on the long term, said the
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| The document says that if the government
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| | State Information Center document, citing
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| encourages more firms to enter the sector
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| | a worsening supply-demand imbalance that
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| by not raising industry thresholds,
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| | will be exacerbated by the rising cost of
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| bankruptcies, unemployment and unpaid
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| | materials.
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| bank loans will inevitably result.
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| | However, despite all the negative
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| In 2005, China had 1,025 auto exporters,
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| | factors, the document said the demand for
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| of which only two had exports valued
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| | cars from China in 2007 will rise by 18 %
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| above US$ 100 million and only eight had
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| | over 2006 to 8 million units, while car
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| exports above $ 30 million. Another 204
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| | output will reach 9 million units, 20 %
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| firms each exported just one auto.
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| | higher than in 2006.
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