Manufacturing News

Chinese Automakers Ask For Help

While U.S. automakers plead for emergency loans from Washington, China's still-young car manufacturers are also appealing for their government's help amid a sales slump.

 While U.S. automakers plead for emergency loans from Washington, China's still-young car manufacturers are also appealing for their government's help amid a sales slump.

That support, they say, could come in the form of subsidies for technology development, easier-to-meet standards and better protection from intensifying competition.

"China is the last booming market nowadays, and foreign automakers are investing more money and building more factories here, threatening our own businesses," Xu Heyi, chairman of Beijing Automobile Industries Holding Co., a partner with Hyundai Motor Co. and Daimler AG.

"I think the government should control this more strictly, and support development of our national brands as much as possible," Xu said in a telephone interview.

China's automakers have seen some relief thanks to the recent easing in commodities prices, Wang Tianjun, a spokesman for Hunan Changfeng Motor Co., a major maker of sports utility vehicles based in central China's Hunan province.

"But sales are still not good," Wang said in a phone interview Wednesday. "The government should boost the economy by strengthening people's buying power and cut taxes to encourage spending."

"I doubt we, as a smaller, local automaker, could get subsidies from the government, but it would be a great help if the government would do something to support the overall industry through these hard times," Wang said.

So far, there is no sign of an all-out industry campaign in China for a bailout on the scale being sought by Detroit's Big Three automakers, General Motors Corp., Ford Motor Co. and Chrysler LLC, whose executives are appealing to Washington for a $25 billion "bridge loan" of cash to help prevent millions of layoffs and stave off bankruptcy.

Meanwhile, support for similar help for European automakers is growing.

Chinese automakers face similar challenges in terms of slowing sales and exports. But the country's relatively new industry lacks the legacy of employee benefits costs and other decades-old burdens of the American automakers.

Beijing's recently announced government stimulus package, which includes billions of dollars in spending on roads and other infrastructure, is expected to give the industry some help.

Most Chinese automakers already have some advantages. Most are state-owned companies that enjoy a degree of support from their local government owners. They also benefit from requirements that foreign automakers operate through joint ventures controlled by Chinese partners.

Many in the industry were stunned, though, when auto sales fell in August and September before gaining 8.4 percent in October. China's total auto sales rose 11 percent in the first 10 months of this year and are forecast to be up about 8 percent for the full year, down from the 18.5 percent increase seen last year.

Overall, nobody expects a contraction in the Chinese industry on the same scale as that seen in the U.S. and Europe. But the dearth of potential car buyers has prompted several major dealerships in Shanghai to close down.

"Times are tough, and my sales have dropped by 30 percent in the past three months," said Bu Yiping, a sales manager at a Volkswagen dealership in eastern Shanghai's Pudong district.

Analysts say that while consumers are holding back from big purchases given the gloom over the economic outlook, many also are just waiting for manufacturers to slash prices further.

What many in the nascent Chinese industry feel is needed is more support for their own efforts to develop advanced auto technology.

Among the most vocal critics of Beijing's auto policies is Li Shufu, chairman of Geely Automotive, who has long accused Beijing of failing to nurture the industry and of imposing safety and environmental standards that are ill-suited for China's developing market.

"Most of the standards were an adoption of foreign ready ones or equivalents that did not conform to Chinese reality," Li told a recent automotive industry forum in Shanghai.

Foreign automakers easily meet such requirements, while local, independent car manufacturers are at a disadvantage, Li said.

"China's self-owned brands are the victims," he said.

Most Viewed in 24 Hours

Special

Start a Digital Twin Journey from Engineering Simulation

Accenture releases survey of digital transformation

CIMC Reduces Unplanned Downtime by 30% with Greater Operational Insight from ThingWorx

Ansys Simulation Speeding up Autonomous Vehicles

回到顶部
  • Tel : 0086-27-87592219
  • Email : service@e-works.net.cn
  • Add: 3B1 International Business Center, No. 18 Jinronggang Road (No.4), East Lake High-tech Development Zone, Wuhan, Hubei, PRC. 430223
  • ICP Business License: 鄂B2-20030029-9
  • Copyright © e-works All Rights Reserved