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Chinese Automakers Looking Elsewhere to Sell New Models

Great Wall became the first Chinese automaker in the UK earlier in the year

Growth of the Chinese market is slowing. While the market it still growing, it is no longer the 30%-50% annual growth seen just a few years ago. Chinese auto sales grew by 2.5% last year. It is forcing Chinese automakers to look for small markets elsewhere because the big markets in North America and Europe will not accept Chinese cars yet. The automakers in China are looking to Indonesia, Egypt and Ukraine first with plans to eventually expand to Europe and North America.

The Chinese cars being sold in these markets emphasize decent quality over luxury features. The Great WallGreat WallChina, 1983 > present5 models
10 photos
HavalGreat Wall Haval 1China, 2005 > present SUV and GeelyGeelyChina, 1986 > present5 models
6 photos
Panda sub-compact car are leading the export charge. CheryCheryChina, 1997 > present7 models
18 photos
and SIACShanghaiChina, 1958 > 19792 models
are also looking for export markets.

"The rapid growth phase of China's auto market is coming to an end, and we see exports as one possible outlet for all the capacity we have built up. We need to go beyond the China market to survive." said Xing Wenlin, Great Wall Motor vice president.

The average Chinese automaker used 84% of their capacity, but that looks to drop to 64% this year. That means the Chinese automakers will be producing cars at only two-thirds capacity, and they are looking abroad to make up for that loss of production.

Geely is attempting to grow worldwide by using the technology that it received when it bought Volvo. It sold 30,000 cars out side of China last year and is looking to sell 60,000 to 70,000 abroad.

"My vision is to sell outside China the same number of cars we sell within China," said Geely and Volvo Chairman Li Shufu.

Last year, China exported 849,500 cars, which was up 50% from 2010. Most of those cars went to Russia and Brazil. The rate of export is expected to grow in the double digits for the next several years.