Global Insight: Chinese OEMs unlikely to sell to Western markets until 2013
Chinese automakers will export more passenger vehicles over the next five years than they do now, but none will be able to sell to the European or U.S. market, according to Global Insight, a market research company.
"Although we will see more Chinese OEMs setting up plants overseas, market entry into the West will not be possible until 2013," says Lin Huaibin, a senior market analyst with Global Insight in Shanghai.
Lin made the remarks when speaking at an annual auto industry conference organized by his company in Shanghai.
Global Insight predicts that passenger vehicle exports by Chinese OEMs will exceed half a million units by 2013, up from less than 250,000 units in 2008.
But the export destinations for their products will remain emerging markets, Lin adds.
Although the models Chinese OEMs sell abroad will have improved design and better quality, they will continue to have difficulty meeting stringent emission and safety requirements of Western countries, he says.
Another major challenge for Chinese OEMs seeking to enter the Western markets is their inability to provide various warranties that are mandatory in these markets.
"They include the anti-corrosion warranty, powertrain warranty and emission warranty that Chinese OEMs now don't have to provide on the domestic market," he adds.
To date, two Chinese OEMs, Chongqing Changan Automobile Co. and China FAW Group Corp., plan to assemble their cars in Mexico in 2010 with the aim of shipping cars to the United States from Mexico.
"Such plans are not feasible as their products can't even meet the safety and emission standards of the Mexican market, let alone the standards of the U.S. market," he says.
