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China is importing more USbuilt carsUpdated: 20140109 04:19

By JACK FREIFELDER in New York (China Daily USA)

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China is importing more US cars, and it is due to additional production by US carmakers andincreased interest from Chinese consumers, according to an automotive analyst.

"The availability of information has changed the appetite of the consumer," said MatthewStover — a Bostonbased analyst with Guggenheim Partners LLC, a global financialservicesfirm. "As the Chinese market matures and there's demand for different types of vehicles, thenChinese consumers can look on the Internet to have an understanding of what's available inEurope and North America."

According to the latest information from the US Department of Commerce, 1.9 million vehicleswere exported from the US in 2012. China was among the top five markets for light vehiclesmade in the US, a list that also includes Canada, Mexico, Germany and Saudi Arabia.

The Detroit Three — Ford Motor Co (Ford), General Motors Co (GM) and Chrysler Group LLC— accounted for more than half of those in 2012.

Due to Chinese government regulations, foreign manufacturers producing vehicles in Chinamust do so as a joint venture with a Chinese company. However, only a limited number ofpartnerships are permitted.

GM has partnered with the Shanghai Automotive Industry Corp (SAIC) to become one of theleading foreign car manufacturers in China.

Stover adds that partnerships and attempts to transfer technological advances could help bringcompetitive products to China.

"The local market is only so capable of satisfying demand, so importing becomes the logicaloption," Stover said.

Nearly half of USbased car exports go to neighboring countries in North America. As a result,Canada and Mexico still pace the top five in terms of sheer volume, but China has showncontinued growth in recent years.

According to data from the US Department of Commerce, China's imports of US cars over thelast four years have jumped from 28,754 units in 2009 to 166,540 vehicles in 2012. Chinaoccupied a relatively pedestrian 2.7 percent of the total US automotive export market in 2009,but that figure has increased more than threefold since, to 8.6 percent of the total market in2012.

According to a July 2013 report from the International Trade Administration, motor vehicleexports to China were less than 1,000 units as recently as 2003.

Charlie Welsh, editorinchief of XportReporter, an online businessinformation journal thatcovers the export market, said that the growth in the US auto industry is an offshoot ofadvances in production technology.

"When you look at the US exports and the National Export Initiative (NEI) under PresidentObama, this is an interesting development because it's not what I would have expected to seein terms of exports really taking off," Welsh said Monday in an interview with China Daily. "Youcan't ignore the developments on the production side that have enabled this to happen.America is associated with advanced technology, and in my mind the US is the only placewhen it comes to new technologies or additives for manufacturing."

During the 2010 State of the Union address, US President Barack Obama announced theimplementation of the NEI — including a goal to double US exports by the end of 2014.

In 2009, 1,065,518 vehicles were exported from the US — the year before the NEI waslaunched. Exports grew to 1,927,352 units in 2012, an uptick of just over 80 percent in threeyears' time. Thanks in part to increased trade with China; the US auto industry is well on itsway to meeting the NEI goal.

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way to meeting the NEI goal.

Ford's operations in the AsiaPacific region have been bolstered by the company's sizeableinvestments in China. With four major facilities in China set to begin production in 2014 and2015, Stover, the analyst who covers Ford for Guggenheim, points to 2015 as a year that Fordcould begin to see benefits from its new business in China.

"Right now you have the organic growth of the Chinese, Thai and Indonesian business offsetagainst the negatives of the Australian market," Stover said. "In 2015, the Chinese facilitiesthat they've launched will be more mature so they'll be more significant contributors to profit."

jackfreifelder@chinadailyusa.com

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