Do not belittle Chinese auto exports

Although traders themselves do not have the ulterior motive to disseminate some information, they often find that the statements made by corporate executives hide the ulterior motives. Sergio, who is also the CEO of both Fiat and Chrysler? Sergio Marchionne warned some western automakers that exports from China will threaten their prospects. Some traders believe that the choice of this opportunity has been carefully controlled in order to influence his negotiations with the U.S. trade unions. In fact, when we read this, we should regard Marchionne as a visionary insider, not a negotiator.

Right now, Western automakers are easily complacent because they don't see any Chinese-made cars on the roads in the United States and Western Europe. General Motors has just announced a remarkable 89% profit growth, and in 2010, the US auto market grew faster than China. Although according to the data from the China Industry Association, the total amount of cars produced in China today is close to the sum of Japan, the United States, and Germany, but a significant portion of these cars are low-end cars, and the export rate is only about 3%. In fact, China imports more cars than it exports—statistical data in this case is very rare in China.

After an in-depth study of the composition of China's auto import and export, it will be found that the calculation of the quantity alone will underestimate China's trade deficit in the vehicle sector. In 2010, China exported a total of 544,900 vehicles, many of which were commercial vehicles. The average price per car is less than $6,000 - which is why they are attractively priced in markets such as Algeria, Iran and Vietnam. The most imported brands in China are the expensive Mercedes-Benz and BMW.

However, this completely deviates from the focus. Thanks to the important technology transfer through joint ventures and acquisitions, coupled with the huge domestic market, not to mention the consistent labor cost advantage, China will soon become a terrible car exporter. In hot areas such as electric vehicles, China is already at the cutting edge. As for its development prospects, it is known to review history. Just a few decades ago, China was jokingly known as the "bike kingdom," and cars are still rare. Judging from the progress it has made so far, the Marchionne prophecy is not sensational.