Acceptance of Chinese Cars in Foreign Markets

China's auto Industry has a long history starting from 1950s. But the number of passenger cars manufactured was very low till the dawn of the new century. Last year (2009) China became the largest car manufacturer, rolling out 10,383,831 cars Which is more than one fifth (21.7%) of the total world production (47,952,995). To see the significance of growth of the Chinese car industry one has to compare these figures with the past. Ten years back (in 1999) china produced only 565,366 cars out of a total world production of 39,759,847 cars, a measly (1.4%).

To see the Chinese cars on roads you have to go to China. Almost all the cars produced in China are sold to the domestic market of 1,33 billion people that is 19% of the total human population of the world. Drawing parallels with other industries in China and the auto industries of Japan and Korea there is no doubt that China will become worlds top car exporter. But when? When are we seeing (and driving) Chinese cars, Chinese branded cars with Chinese badges. I am sure it will be sooner than we think.

Geely Automobile Global showcased their Silver CK2 Sedan at the Detroit Auto Show 2006.

China has been exporting an insignificant number of cars, but their real export drive started lately. Chinese exports fell sharply in 2009 with the falling demand for cars. (from 680,700 in 2008 to 369,600 cars in 2009). Chinese exports are a mere 3 per cent of the domestic sales. But in 2010, car exports started recovering and the it may take some more time to make a significant impact in foreign markets. When the demand for cars catch up once again in new rich Asian markets as well as developed markets like US,Europe and the Middle East, Chinese success will depend on the acceptance of the Chinese cars in these markets.

The Chinese Automakers have their visions for the future and are not only exporting cars, but they are starting production in other countries and taking over the ailing European companies. Geely purchased ailing Swedish car maker Volvo for US$ 1.8 billion. This would help Geely to use Volvo's well established sales and Marketing network. Geely already has four plants operating in foreign countries (Russia,Ukraine, Indonesia and Malaysia) and planning to open another plant in Turkey. Other Chinese exporting automakers like Chery, Lifan and Great Wall also have their ambitious export programs.

But Chinese cars will have to face competition from Japanese cars, Korean Cars, European Cars and used cars from Japan in different markets.

At the moment Though it is certain that Chinese cars will be on the roads all over the planet, it may take some time. But they have to gain acceptance by improving quality, establishing sales and after sales networks and developing hot cars.

Geely has launched their MK  fitted a 1.5 litre engine in Australia. With a very low entry price it may start selling it reasonably well for a new entry.

Chery QQ has found some acceptance in some markets due to its fuel efficiency and many features coming as standard. It is fitted with a 800 cc ngine.