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China's car makers must strengthen efforts to build brands in order to fortify their foothold in the overseas market, senior officials and experts said at an automotive forum in Guangzhou yesterday.

 

Addressing the 2006 China (Guangzhou) Automotive Development Forum, Zhang Xiaoyu, vice-president of the China Machinery Industry Federation, said domestic car manufacturers should improve the quality of their products by attaching greater importance to R&D and improving innovation if they want to increase their share of the overseas market.

 

"The present export volume does not matter so much as brands," he said. "Technology-intensive products will mean better profits and will help to build up a good reputation for the products, which will play a decisive role in the final success of the products in the global market."

 

Zhang's remark pinpoints the fact that many domestic car manufacturers have been undercutting their products for a minor overseas market share instead of improving product quality as part of a long-term strategy.

 

Latest customs statistics indicate that the price of a China-made sedan was only US$7,039 on average in the global market in the first four months of this year, a continued fall from US$9,161 last year.

 

Zhang also called upon domestic manufacturers to focus on a few target markets rather than sending their products all over the world.

 

"To secure a target market, they should make much greater efforts to improve after-sales service," he said. "Buyers will definitely turn to other foreign brands if they find the after-sales service hardly available."

 

Zhang's comments were backed by senior officials and the senior executives of car joint ventures at the forum.

 

One of them is Zhang Ji, deputy director of the mechanics, electronics, and high-tech industry department under the Ministry of Commerce.

 

"China-made vehicles have gone primarily to the low-end markets in the Middle East, Africa and Southeast Asia; however, low-end products do not mean poor-quality products," the official noted.

 

He said technology-intensive quality products would help domestic vehicle makers steer clear of technological trade barriers one of the largest obstacles to China's vehicle exports.

 

"And the present global markets must be cultivated with development strategy and marketing strategy; they cannot be treated as merely experimental fields."

 

He said there is great potential for China's automobile export business and the State should hammer out more policies to keep its development on the right track.

 

He said a new policy would come into effect in 2007 to restrict domestic automotive companies that have not reached a set export volume from the export business in a bid to minimize undercutting.

 

A total of 1,025 companies were involved in the automobile export business in 2005, over 600 of which exported fewer than 10 vehicles, and 160 of which exported only one vehicle.

 

Official statistics indicate that China exported 172,639 vehicles in 2005, up 120.5 percent from 2004.

 

The number of sedans exported in 2005 was 31,125, up 233.4 percent on 2004.

 

And the nation exported 87,200 vehicles including 23,300 sedans in the first four months of this year, soaring respectively 140 percent and 350 percent from a year ago.

 

(China Daily July 27, 2006)