CHINA AUTOMOTIVE

ASIA: China is now a net passenger vehicle exporter.

In a survey conducted by Deloittes, Chinese automotive executives estimated that the proportion of exports to total sales of automotive products will grow from 14% in 2006 to 28% in 2010.

China first became a net exporter of passenger vehicles in 2005 when exports grew 224% over the previous year. The majority of vehicles went to developing countries.

Several factors identified by Deloittes have served to dent industry optimism:

excess capacity resulting in a steep drop in prices;

reduction in profitability as cost reductions lag price reductions;

reduction in vehicle import duties.