BEIJING -- Starting next year, the Chinese government will restrict the number of vehicle makers allowed to export. The move aims to protect the image of Chinese automakers.
"The government does not want the undisciplined export by Chinese OEMs to lead to potential anti-dumping penalties in key markets and to damage Chinese auto exports," says Paul Gao, a principal with consultants McKinsey & Co. in Shanghai.
The motorcycle industry provides the clearest example of the danger of taking a laissez-faire approach to auto exports. Uncontrolled exports of low-quality, low-price motorcycles led to anti-dumping charges in many markets and damaged the reputation of China-made products, Gao says.
China's vehicle exports more than doubled in 2005 to 170,000 units. The majority were commercial vehicles, from heavy-duty trucks to minivans. About 30,000 were cars.
The government has not spelled out the criteria to receive permission to export. But permission is expected to depend on meeting technical requirements, such as emission controls, and having a certain volume of export orders.
Chery Automobile Co. and Geely Automobile Group, which plan to begin exporting to the United States in the next few years, aren't concerned.
Lin Huaibin, a Chery manager for international sales, says: "The new regulation requires that you pass some safety and emissions tests before you can export. We can pass the tests. I don't think this is a serious issue for us."
Chery topped China's car exporter list in 2005 at 15,000 units. It aims to export 40,000 cars this year, Lin says. The exports went to the Middle East, Southeast Asia, Russia and South America.
Geely exported 7,000 cars to developing countries in 2005. It aims to export 10,000 this year.
Geely spokesman Lawrence Ang welcomes the regulation.
"The government has learned well," Ang says. "Before it explodes, they try to implement a system" controlling vehicle exports.
Geely already has been hurt by another company's quality issues.
The company introduced itself to Europe at the Frankfurt auto show last September. But the limelight was stolen by another Chinese automaker. The media focused on reports of how the Landwind SUV, manufactured by Jiangling Motors Corp., failed European safety tests.
Says Ang: "All the reporters in Frankfurt didn't ask about our cars. They asked about the Landwind."
You may e-mail Alysha Webb at [email protected]