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Chinese version of Mercedes-Benz E-class sedans hit market
Beijing Benz-DaimlerChrysler Automotive Corporation, a Sino-German joint venture, announced that Mercedes-Benz E-class sedans manufactured in Beijing were on sale as of Thursday and they were accepting orders beginning the same day.
On sale are E280 and E200K sedans, and retail prices are 620,000 yuan (76,449 U.S. dollars) and 525,000 yuan (64,735 U.S. dollars) each, respectively, said An Qingheng, chairman of the board of the joint venture.
Beijing Benz-DaimlerChrysler is a new joint venture of DaimlerChrysler and Beijing Automotive Industry Holding Company (BAIC). The joint venture has built a new plant in the Beijing Economic and Technological Development Zone at Yizhuang, southern Beijing.
DaimlerChrysler and BAIC each have a 50 percent stake in the joint venture, with a cooperation term of 30 years. The joint venture, which has a registered capital of 400 million U.S. dollar, is responsible for production of Mercedes-Benz E- and C-Class sedans in China.
Production in the new plant began in mid-2005.
An predicted 900 Mercedes-Benz E-Class cars would be sold by the end of the year, and the volume of sale would amount to 500 million yuan (61.65 million US dollars). 
(People's Daily)
Beijing gets new fuel cell cars for Olympic fleet
Beijing Public Transportation Corp. got Wednesday three brand new fuel cell passenger cars from world leading automaker Daimler-Chrysler.
The three new cars, prototypes of the green vehicle fleet serving the Beijing Olympics, will be used in Beijing's hi-tech zone, or Zhongguancun Area, for public transportation in an 8.19-km route.
The experimental commercial use of the fuel cell cars is the first of its kind in any developing country.
The Beijing Public Transportation Corporation has prepared all facilities for hydrogen refilling, which is vital for fuel cell cars, data collection systems, training for drivers and service management.
The Global Environment Fund and the United Nations Development Program supported the experimental project for promoting free-emission fuel cell cars in China, which will host the 2008 summer Olympics and the 2010 World Expo in Shanghai .
The three cars were shown at the Fourth International Clean Vehicle Technology Conference and Exhibition.
At the inaugural for the exhibition, Ma Songde, vice-minister of Science and Technology, said that the development of energy-saving vehicles is one task for build an energy-saving society and an environment-friendly economy.
As the world's most populous country and a developing one, Ma said, China should cultivate an auto industry oriented for saving energy and protecting the environment.
Fuel cells transfer hydrogen to electric power, which produces no pollution. Many big auto companies in the world invest much into the research and development of such environment-friendly vehicles.
An industrial policy guideline issued by the government in 2004 supported the development of vehicles using clean energies.
Ma said Chinese companies need to combine their own innovative capacity with the latest technologies licensed by multinational auto makers to shape the cutting-edge in the industry.
At present, Chinese auto makers have already developed more than 100 kinds of hybrid cars and fuel cell cars, many of which were shown at the Beijing exhibition.
(People's Daily)
Chery autos to be sold in South America
Chery Automobile Co Ltd in China and a Spanish auto company signed a cooperative agreement on Monday in Madrid, reports the People's Daily on November 15.
Yin Tongyao, director-general of the Chery company told the reporter that the Spanish company will be a sales agent for Chery autos in South America in accordance with the signed agreement. Yin Tongyao believes that China's homemade brand name Chery autos have competitiveness internationally. There is a good prospect for Chery auto sales in South America
(People's Daily)
GM plans to develop hybrid electric vehicles in China
General Motors has announced to produce hybrid electric vehicles (HEV) in China before 2008, making itself the latest automaker that has announced to make HEV for the Chinese market.
(People's Daily)
Toyota, GM to jointly develop automated driving system
Toyota Motor Corp. and General Motors Corp. of the United States have launched joint research on an automated driving system that will help prevent vehicle collisions, the largest Japan ese automaker said Friday.
The automated driving system is one of the intelligent transport systems that the auto industry has been developing to prevent traffic congestion and accidents.
The joint research between the leading Japanese and US automakers is expected to focus on technologies that would allow vehicles to identify their locations through wireless communication and automatically control speed and location, the company said.
Toyota has been developing a system for vehicles to use laser beams to detect people and other vehicles.
These technologies are expected to allow vehicles to go to prefixed destinations without drivers.
Toyota and GM, which have kept close ties through their joint vehicle production in the United States since the 1980s, have also been conducting joint research on environmentally friendly fuel cell cars.
They may be willing to take advantage of such joint research to help save development and production costs, according to the company
(People's Daily)
Important notice on Chinese drivers license
Foreigners are now subjected to the regular twelve points rule on the Chinese driver’s license. If you accumulate twelve points from various traffic rules in one calendar year, your driver’s license will be revoke and you will be required to apply to take the written test again.Please Visit the Beijing traffic management bureau website http://www.bjjtgl.gov.cn to check your records. Your car plate and engine number will be required.However this rule does not applied to members of the diplomatic community.
Brand new Audi A8L priced at 1.67 million yuan
On August 29 Trevor Hill, Executive Director of Audi China, and Madam Jin Yuxi attended the inauguration ceremony of Audi A8L. The Audi A8L, the world most luxurious limousine, went into market in Dalian that day, with a price between 899,000 to 1,674,000 yuan. The price for Audi sedan with the highest configuration has already exceeded that of its rival, BMW 760.
It is reported that the first group of Audi A8L will be put into market at the end of September this year. The front part of the brand new lengthened version of Audi A8L is featured with an exaggerated front view.
Hill noted that Audi vows to introduce the high-grade productions that best serve Chinese customers into China. Meanwhile, he also said that Audi A8 currently has no plan to set up manufacturing base in China.
China to become second largest auto market
Satinet Claude, general manger of the French Citroen Automobile, said Saturday despite the fact that China's auto market in 2004 was not as good as it had been two years ago he still believed that China would become the second largest auto market in the long run.
Satinet said while releasing the company's annual report Citroen produced 78,000 cars in 2004 in cooperation with China whilst the production in 2003 was 104,000. The reason of the reduction was that the China auto market experienced sharp demand decrease after "blowout" in recent years. In addition, too many newcomers joined the competition, which led to fierce price cuts. To guarantee the value of its brand Citroen voluntarily limited its production.
Satinet said although China's auto market entered an adjustment period from the short-term point of view, in the long run, that is, in the foreseeable ten years, it would become the second largest auto market in the world. He believed after sometime China's auto market would complete restructuring and its growth would be steady and strong.
Citroen's official in charge of China affairs said to the reporter that those who felt most pressured in China's auto market in 2004 were foreign companies that entered China long ago. He said China's new regulations on auto industry would boost the healthy competition in the auto market. He was confident of the future of China's auto market.
By People's Daily Online
Analysis: "minor issues" affect growth of China's auto market
As causes of the slowdown of China's automobile market growth are being explored, attention is cast towards more minor issues -- such as parking shortages.
Liao Zhenyun, a citizen of Beijing and new car owner, has faced parking problems, dimming the enthusiasm he had when he first purchased his car.
"I usually don't drive out my car in the evening. Because if I return late, it would be very hard for me to find a parking space," he said.
He didn't drive out often in the daytime either, because parking is also difficult in many places, including department stores, restaurants and government offices.
"I'd rather take taxi as much as possible. At least I don't have to spend much extra time looking for parking spaces," he said.
As the number of cars grows rapidly in China, shortage of parking has become a serious problem in many large Chinese cities.
"There are around 1.09 million certified parking lots in Beijing at present, but the number of cars in the downtown area alone amounts to around 1.5 million," said Liu Xiaoming, deputy director of the Beijing communications commission.
As a result, many cars are parked illegally, mostly on both sides of the less important streets or lanes.
In addition to the parking difficulty, car owners also face inconvenience in car repair and increasing traffic congestion.
"If my car breaks, I'll be very worried if the repair shop will ask for exorbitant fees or use shoddy parts on my car," said Miao Jie, an company employee in Beijing.
These issues have prevented many people from carrying out their car purchase plans. The reason is simple: owning a car is for personal convenience. Why should I buy a car if it causes so much inconvenience to me?
"China has not been ready for the coming of an automobile society yet," said Miao. "Supporting facilities, including parking space, traffic control systems and car maintenance and repair systems are still gravely inadequate."
That may be contributed to the too fast growth of automobiles on the road. The growth of supporting facilities have failed to keep pace.
In the two years after China joined the WTO at the end of 2001, China's automobile market experienced three years of sustained boom that stunned the world but also tapped to the full existing supporting facilities.
In making any forecast about the development of China's automobile market, "minor issues" should be seriously considered along with such general issues as China's vast population, rapidly growing economy and rise of people's standard of living.
As automobile prices drop, a lot more Chinese people can afford cars nowadays, but they at least must find a space for them. Until that basic requirement is met easily, growth of China's automobile market will have to maintain a moderate speed.
By People's Daily Online
China expected to buy 5.8 million cars this year: expert
Chinese people are expected to buy 5.8 million cars this year, a year-on-year rise of 12 percent, said Xu Changming, director of the economic consultative center under the State Information Center on Saturday.
The demand for saloon cars this year would be 2.75 million, up 17 percent on a year-on-year basis, said Xu at a forum on China'sauto industry.
Xu predicted China's auto industry this year would be better than last year, but the blowout growth in 2002 and 2003 would never come again.
A report by the State Development Research Center said the growth of the automotive industry would keep dropping for the first half year of 2005, but in a slow pace.
The country's total car production would grow at 15 percent to 20 percent, producing and selling some 6 million cars, said the report.
Xu said further price cut would continue this year and attract more buyers. A survey by the State Information Center shows 63.8 percent of the residents would buy a car because of the price cut.
In 2005, China would lower its car import tariff for cars to 30percent and abolish its quota system on car import. Xu predicted about 80,000 imported cars in storage would be sold in 2005.
By People's Daily Online
China to produce 6 million cars in 2005
Despite slack auto market in the latter half of 2004, China is expected to churn out more than 6 million cars in 2005, 20 percent more than last year, replacing Germany as the 3rd largest manufacturer of motor vehicles, Zhang Xiaoyu, vice-president of the China Federation of Machinery Industry (CFMI), said Saturday in Beijing.
China's auto market expansion was slowed down last year due to speculation that auto prices will be further reduced, Zhang said. "The market potentials have been delayed, which does not mean the lack of market demand."
In 2004, domestic manufacturers turned out 5.0705 million motor vehicles, and sold 5.711 million entire car units, representing increases of 14.11 percent and 15.50 percent respectively compared with 2003.
As prices are down to the lowest possible level this year, auto sales will finally pick up its momentum, Zhang said, predicting that the increase could be up to 20 percent.
Wang Qing, a researcher with the Market Economic Research Institute of the State Council Development & Research Center, holds a similar view.
"Price fluctuation of automobiles this year will be less volatile, because profit margins are reaching bottom low and overstocking pressure greatly eased," he said.
Industry insiders also predicted that the growth market for domestically manufactured motor vehicles may just be outside China.
CFMI vice-president Zhang Xiaoyu said that Chinese cars with a price tag at 5,000 US dollars are highly competitive in the world, especially in southeastern Asian countries, and the 10,000-US-dollar cars may also have a larger slice of the world market share.
According to CFMI figures, China exported a total of 90,000 entire cars last year, 140 percent more than in 2003.
By People's Daily Online
China's auto market expected to grow 10-12% in 2005
China's automobile market is expected to grow by 10 to 12 percent in 2005, with a market scale of more than 5.6 million units, an automobile expert predicted.
"With more manufacturers achieving more production capacities in the next two years, the auto market is still set to see a production surplus and fierce competition this year," said Jia Xinguang, a chief analyst with the China Automobile Consulting Corporation.
Jia said major factors including the government's financial policies and rise of materials prices would affect the production and sale of automobiles in 2005.
Tight macro-economic control, begun last year, to some extent has restricted the development of automobile market, which also happened in the previous macro-economic control in the 1990s, Jia said. In 1993, the growth rate of automobile production for the whole year dropped from 40 to 22 percent after macro-economic control policies were implemented in July.
With the rise of production costs and sustained price reductions, nearly one third of automobile manufacturers have experienced losses and one third of auto dealers have left the business. Profit margins saw a large overall drop in 2004.
Jia said the rising cost of materials and interest rates have increased automobiles' production costs, which to some extent affected the automobile market in the past year.
"Yet the shrinking of automobile credit contributed greatly to the so-called automobile market depression in the late 2004." Jia said, adding that fewer than one tenth of consumers purchased cars through credit in the second half of 2004, a sharp contrast to theone third who did so in the year's first half.
The ratification of five foreign-funded automobile financial institutions has had little effect on promoting car sales, due to unfavorable credit situations and stern operation limits, he said.
Jia said the rising of fuel prices and local policies of limiting automobiles with low air displacement have also had a great impact on the automobile market.
"Rising oil prices made people put off buying their own cars, and local policies prevented a number of consumers' purchase of low fuel-consuming cars," he said.
China's automobile market experienced three years of sustained boom that stunned the world after the country's entry into the World Trade Organization in 2001. However the sharp decline of the market in 2004 caused a panic among the manufacturers and consumers.
Sector insiders said the decline of auto market is a sign of returning to a normal track of development following the eruption of people's purchasing desire in the past few years.
With a vast population that is becoming ever and ever more affluent, the Chinese market potential is surely appealing. But some seemingly tiny matters might obstruct the potential from becoming realized.
"China is not ready for the coming of an automobile society yet," said Jia. "Supporting facilities, including parking spaces, traffic control systems and car maintenance and repair systems arestill gravely inadequate."
By People's Daily Online
Mercedes-Benz recalls three models in China
Mercedes-Benz China announced Friday a recall in China of 5,345 cars of three models to fix a problem with the brakes.
The car manufacturer will check and upgrade the braking system in all E-class, SL-class and CLS-Class cars built after June 2001, said Mercedes-Benz in a report submitted Friday to the State Administration for Quality Supervision and Inspection and Quarantine (AQSIQ).
Before the notice, the company had not received reports of accidents or injuries caused by the cars' brakes.
The company said its service center will try to reach the owners of the three models. It has also established hotlines for Chinese customers.
By People's Daily Online
China's stagnant auto market shows signs of recovery
China's auto market, relatively stagnant since last July, showed signs of recovery in March, the Beijing-based Xinjing Newspaper reports Wednesday.
China's six major automobile producers reported each auto sales of more than 20,000 in March, 138,480 cars in total, up 85 percent over February, the paper says.
The First Automotive works (FAW) ranked first with 25,326 units sold in March, Shanghai General Motors ranked second with 25,260 units and Shanghai Volkswagen was third with 23,478 units.
Chinese consumers are beginning to buy vehicles after adopting a wait-and-see attitude for several months. Insiders say the competition for the auto market is fierce this year.
China's auto sales increase suddenly dropped to zero last July from a 40-percent monthly increase in the first five months of 2004, as a price war broke out among the country's auto manufacturers.
In 2001, 750,000 cars were sold in China. The number jumped to 1.2 million in 2002; it topped 2 million in 2003.
Experts forecast that by 2005, about 42 million Chinese families will be able to afford cars. In 2025, China is expected to take the place of the United States as the world's largest car consumer.
By People's Daily Online
International auto giants cast shadow over Chinese auto manufacturers growth
As BMW, Volkswagen, Toyota -- andother foreign auto manufacturers -- have or plan to have a strong presence in one of the world's biggest auto market, China's local automobile manufacturers are finding an increasingly small stake.
The situation can be easily noticed at two major ongoing event in China -- the Bo'ao Forum for Asia in southernmost Hainan Province and the Shanghai Auto Show, where executives of foreign auto businesses discuss China's auto industry at present and in the future.
While Shanghai Automotive Industry (Group) Corporation (SAIC), one of the world top 500 businesses in 2004, can only boast performance of its "hybrids" -- cars jointly developed with foreign partners, Beijing Hyundai, which burst on to the stage with surging sales last year for its Elantra and Sonata cars, is identified by many as being of South Korean, instead of Beijing, origin.
Only the FAW Car Co., Ltd., the home to China's first self-developed Jiefang truck and Red Flag sedan in the 1950s, seems to hold up its own banner. But pushed by competition pressure, the Red Flag sedan, China's national car emblem, has to use Audi's body and Chrysler's engine to remain attractive.
Worse still, more foreign players announced their plans of expansion at the Shanghai Auto Show to compete on the world's third largest auto market, where some 5 million autos were sold last year and more than 570,000 sold in this year's first quarter.
"An auto brand crystallizes many factors such as technology, marketing, after-service and reputation. Without your own brands, no matter how many cars you are producing, you are doing it for others' glory," said Dr. Wan Gang, President of the Shanghai Tongji University.
According to China's commitment made at its entry to the World Trade Organization in late 2001, China repealed import quotas of autos and key auto parts and cut the tariff to 30 percent as of 2005.
As a result, foreign auto manufactures are able to promote their products at much lower prices than before. Take Modeo of Ford for example. The middle-class car sells at around 230,000 yuan (27,710 US dollars) and the price is expected to drop more. The car used to sell at 300,000 yuan (36,144 dollars).
In return, domestic auto companies have to further lower their prices, with Cherry sees the price of its mini QQ series falling from 45,000 (5,421 dollars) to less than 30,000 (3,614 dollars) atpresent.
In addition, strong research and development capacities of foreign auto manufacturers have compounded challenges for Chinese companies.
Big names such as General Motors and Ford invest five to six billion dollars in R&D, but Chinese auto companies generally spendless than two percent of their sales revenue on R&D.
So far, 51 companies with auto production background in the world top 500 businesses have set up joint ventures in China, making auto competition in China thronged with foreign competitors.
"The auto industry is a dynamic strategic industry. No economicpower is willing to sell its auto industry development rights. Thekey auto technology cannot be bought," said Lin Xiaogang, president of the Brilliance China Automotive Holding Ltd.
"The only choice for China's auto sector is to stick to self-development by learning from world advanced technology and conductR&D by itself," he said.
Maybe Chinese auto entrepreneurs should also bear what BMW President Helmut Panke said in mind: advanced technology and strong development capacity are the fundamental guarantee for BMW's huge success in the Asian market.
By People's Daily Online
First made-in-China cars sent to Europe
Japan's car-maker Honda Motor Co Friday started to ship its made-in-China cars to Europe with Germany as the first destination.
This is the first time cars have been exported from China to Europe.
Honda plans to export 10,000 units of the Jazz hatchback to Europe this year, it said.
The 1.2- and 1.4-litre Jazz is being made at Honda's joint venture in Guangzhou with the Guangzhou Automobile Corp and Dongfeng Motor Corp.
The Jazz will also be shipped to Italy at the end of this year, Honda said.
"Our export activities are based on the synergy of China's competitive advantages and Honda's global network," said Atsuyoshi Hyogo, chairman of the joint venture and head of Honda's operation in China.
The Jazz will be sold in Europe through Honda's networks there.
At the moment, Honda also exports Jazz cars made in Japan to Europe.
"Production costs in China, although a little bit higher than in Japan now, will be lower with growing volume within the next five years. We will take this advantage to export cars from China to Europe," Hyogo said.
Output of the joint venture in Guangzhou, named Honda Automobile (China) Co Ltd, will reach 50,000 cars in five years, he said.
Honda Automobile (China) Co Ltd, launched in 2003 with a registered capital of US$82 million, is the first totally export-oriented Sino-foreign car joint venture.
Honda controls a 65 per cent stake in the joint venture, Guangzhou Automobile 25 per cent and Dongfeng 10 per cent.
The local content rate of the Jazz cars made at the venture stands at more than 60 per cent as they share a lot of spare parts used by the Fit cars produced at Honda's other joint venture in Guangzhou with Guangzhou Automobile, or Guangzhou Honda.
Honda is one of the fastest-growing foreign car makers in China, where the car market has decelerated sharply.
The company's sales in China surged by 51.4 per cent year-on-year to 92,338 vehicles in the first five months of this year.
Guangzhou Honda also makes the Accord mid-sized sedans and Odyssey wagons.
Honda also runs a joint venture in Wuhan, capital of Hubei Province, with Dongfeng.
The venture produces the CR-V sport utility vehicles now and will introduce the Civic next year.
Sales of cars made in China totalled 2.3 million units last year, up 15 per cent from 2003.
The growth was down from more than 70 per cent in 2003.
By People's Daily Online
Swedish market welcomes "China-made autos"
Sixty per cent of Swedish auto retail dealers are willing to sell low-price mini-cars made in China, according to Xinhua quoting the Swedish "Dagens Nyheter'' (Daily News) in Stockholm on July 2 as saying.
European Union member countries can have a free choice to import sedan car brands and models since the EU's cancellation of car import brand restrictions, quoted the newspaper from a recent market survey released by a Swedish auto consultancy company. In Sweden, most of the auto retail dealers are interested in the sales of China-manufactured cars with prices below 50,000 Swedish Kronor (6,400 US dollars), and 65 per cent of the dealers has started to plan the imports of new brand China-made cars.
First of all, Chinese autos should come up to the EU stipulations in terms of safety and environment protection performances when entering the EU market. However, many of Chinese cars cannot fully reach the standards. Nevertheless, that will not be a problem, said a EU official in charge of the survey. He said auto manufacturers in China have enough time to learn from advanced technologies and experiences abroad. Especially the auto producers in the United States, Europe and Japan have set up plants in China, which is beneficial for China to improving its technologies as soon as possible.
By People's Daily Online
SAIC makes offer for MG Rover assets
Shanghai Automotive Industry Corp said it had submitted a formal offer for the assets of MG Rover, breathing new life into its collapsed bid for the carmaker.
"SAIC Motor has today announced that it has submitted an offer to PricewaterhouseCoopers (PwC), the joint administrators of MG Rover Group Limited and Powertrain Limited, for the combined assets of the two companies," it said. PwC would not confirm the offer when contacted.
The bid was believed to be worth around 60 million pounds (105 million dollars, 87 million euros) and would be fully funded by the Chinese carmaker.
In response, businessman David James announced he had put together a British-backed bid to prevent MG Rover from falling into Chinese hands.
Three possible buyers are in talks with administrators in the race for MG Rover -- thought to be SAIC, its mainland rival Nanjing Automobile and James' consortium.
"SAIC believes that (its) proposal represents a compelling proposition for the creditors of the two companies" comprising of MG Rover and its engine firm Powertrain, SAIC added.
"The offer envisages a strategic collaboration with Magma Holdings Limited, which will focus on the development and distribution of new models and a resumption of car production at Longbridge."
Last week SAIC signed a letter of intent for a strategic collaboration with bid vehicle Magma, founded by Martin Leach, ex-head of Ford of Europe, and Edward Sabisky, a former General Motors executive.
Meanwhile David James, a British company recovery specialist, was trying to raise money to back up his bid.
Barrie Wills, spokesman for his bid -- entitled Project Kimber -- said: "This is the last chance to save Britain's largest independent car maker from falling into overseas ownership.
"It is a credible, fully funded bid with a strong management team that has varied and extensive expertise working in the motor industry."
He also spoke of a "pragmatic and realistic business plan that will see the brand develop over the coming years and job development at Longbridge". The initiative has been mainly centred on the MG-TF sports car.
Century-old MG Rover, which produced the Mini and Jaguar, was forced to axe 6,000 workers in April when it closed the Longbridge plant in Birmingham after a failed tie-up with SAIC helped push it into bankruptcy.
However, there has been speculation that up to 2,000 jobs could be created within the next few years at the Birmingham plant if production is revived, but no official figure has been put forward.
By People's Daily Online
Will homemade sedans be made cheaper?
Prices of homemade sedans have long been a frequently asked question by consumers who wonder how much room there will be for price decrease.
Sedan prices which used to be buoyant began to drop in 2001 when China joined the WTO and maintained the downward movement consistently since then. Rounds of price cuts have swept nearly all homemade sedans ranging from small and mini models below 50,000 yuan to those worth 200,000 to 300,000 yuan for mid- and high-end market. The price-cut campaigns in 2004 were conducted on such a scale and with such a frequency that have never seen before.
The price of a sedan is normally based on 4 factors: cost, taxes, manufacture's profit and dealer's profit. Carmakers buy 60 percent of components from suppliers or foreign exporters. In recent years, they have been increasing the domestic component supply for their car production.
However, many individual domestic car parts manufacturers, in large quantity but of small scale and investment, can only supply components to one or two carmakers or models, making it difficult to bring costs down for homemade cars.
During the CPC and CPPCC conference last year, there were voices calling for removing car consumption tax designed to discourage car consumption as using a car should not be regarded as luxurious consumption. But this was not adopted.
Enterprises make profits to survive. In car business, in particular, players have to invest heavily and face high risks. Any business in this sector has to input part of its profit as investment to sustain development and growth.
90 percent of sedans currently sold on the domestic market are made by joint ventures. It costs a joint venture 20 to 30 percent higher than the world's level to make a car due to various reasons, including steel imports, parts procurement, taxes and operating costs. And it is too difficult to narrow this gap in the foreseeable future.
During the car exhibition in late April this year, many car producers complained about the rising prices of iron ores, crude oil, rubber and chemicals, and some car parts and components. This has led to the soaring costs of making a car. In this case, there is not much possibility of bold price cuts. Instead, a few models are even likely to be priced higher.
As learned from authoritative sources, profits of domestic carmakers shrank as much as 26 billion yuan over the six months from Jan. to June this year. The sedan sector suffered 60 percent profit plunge compared with the first half of 2004. And an array of carmakers is struggling in loss making.
Experts with China Automobile Technology and Research Center argued that homemade sedans for the mid and low market have been marketed at prices lower than those on the international market. Sedans valued more than 200,000 yuan are mostly priced at a similar level as those on the world market. The situation where neither production capacity expansion nor tax cuts are realized makes it not much possible to see prices of homemade sedans down soon.
By People's Daily Online
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