China is targeting an increase in vehicle exports over the next five years as it enters its 12th Five Year Plan period, with carmakers targeting both developing markets and more mature sectors such as the US.
Building on developments in the last phase, which ran from 2006 and saw significant investment in infrastructure (9% of GDP last year), the next five years will focus on building in quality to the services on offer and developing new provisions for export activity, with an emphasis on joint ventures and an increase in outsourcing logistics activity.
As was revealed at this week’s Automotive Logistics China conference in Shanghai, which concludes today, exports are on the rise again, with 550,000 vehicles moved last year, a rise of more than 69%. And according to Wang Gang, from the Chinese Federation of Logistics and Purchasing, the first two months of 2011 saw 99,000 vehicles exported. Significantly, this included new markets such as Brazil.
Chinese carmaker, Jianghuai Automobile Company (JAC), moved 10,000 of its vehicles to South America in Q1 with Eukor, according to Chi Ruzhao. In August last year the company announced it had signed the Exclusive Distributor Agreement with Brazilian dealer SHC.
JAC began exports to South America 20 years ago, beginning with Bolivia, and last year hit 20,000. Chi said that the company could raise that to 50,000 by the end of this year.
While China exports the majority of its vehicles to developing countries, BYD Auto’s commercial and logistics senior manager, Xiong Tianbo, revealed that the company was targeting the US and Europe for electric vehicles, which it said was a core product for those markets. Xiong said that BYD had set up a trading company to sell electric vehicles in the US and that it was the company’s most important export market.
Port investment is crucial for this export activity, which is something that the country is prioritising but Meng Qin, import and logistics manager at Porsche (China) Motors, said that capacity was tight at Shanghai port which could be a problem for import and export growth as the company was looking at significant development in China.
Of the country’s total finished vehicle production, only 3% was currently exported compared to Korea’s 70%.
The government is investing RMB7.7 trillion in transport for the wider logistics industry to remedy existing problems, including those to do with capacity. Wang Ming from the NRDC said it was targeting bottlenecks and investing in equipment and innovative ideas for multimodal. In 2010 import/export activity saw growth of 36% with automotive logistics sitting at the top of the list according to Dr Zhang Xiodong from Beijing Jiao Tong University (pictured).
At the moment the country exports more parts than vehicles, with 20+% growth this year worth $85 billion, but the export mechanism needs strengthening to make it sustainable said Wang Gang.