Wish Come True: China Finally Exporting Cars In Earnest - With A Little Help From Its American Friends

It’s not quite the bursting bubble that had been prognosticated by many through the last decade, but there is no doubt that “the world’s largest auto market sputters in a slowing economy,” as Reuters writes.

“Be careful what you wish for” is not the Chinese proverb it often is made up to be, but it applies: The red menace of Chinese car exports, longer predicted than the bursting bubble and likewise for long a chimera, finally appears to get going. The sputtering Chinese home market provides the push to find better fortunes abroad, but General Motors broke the dam that held Chinese exports back.

For some Chinese carmakers, writes Reuters, “exports, mostly to emerging markets such as Ukraine, Indonesia and Sri Lanka, may offer some relief from weak sales at home.”

Indeed, while Chinese automobile sales were up a little less than three percent in the first half of the year, China’s car exports rocketed up by 28 percent to 487,900 units, says Xinhua, citing data the data provided by the China Association of Automobile Manufacturers (CAAM.)

Geely, which owns the Swedish brand Volvo, “posted an 8.7 percent increase in first-half profit,” says Reuters, “but, while it sold 9 percent fewer cars in China, its exports trebled to 40,061 vehicles.” Geely is set to sell 90,000 cars outside of China this year, and wants to triple this to 300,000 cars sold abroad by 2016. China’s Great Wall is another Chinese company with international ambitions. It has established a plant in Europe’s soft underbelly Bulgaria, and made quite a splash on Bulgaria’s sales charts.

While all eyes are on China’s second-tier manufacturers, China’s juggernaut SAIC has for years quietly built bases abroad – with the help of its partner GM.

Two years ago, Chinese car exports were just a trickle and were far outnumbered by high value imports, notably from Germany. One car manufacturer started to change the trade imbalance: General Motors. GM started exporting the Made-in-China Chevrolet Sail. First to South America, other markets like Africa, Middle East and Eastern Europe followed.

“If this helps GM stay solvent and profitable, more power to them!” TTAC correspondent SVX perlie wrote back then. Not quite. GM had just been bailed out in order to protect jobs in America, not to create jobs in China, not to undercut the already feeble chances of American products in export markets. Remember: When a car is made by a Chinese joint venture, at least half of the profits (and initially all of the cash) remain in China.