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Manufacturers, Exporters, Wholesalers - Global trade starts here.
Automakers Brace for Prime Sales Season

China's auto makers are bracing for the prime selling season as the year end approaches.

This may trigger a fresh wave of price competition, experts say.

Many China-based auto companies are having a hard time due to overstock and difficulties in collecting money from debit customers.

As a result, the auto prices in China, especially those of sedans will soon fall, said experts at the Fourth China Auto Industry Summit, which concluded Monday in Shenyang, capital of northern Liaoning province.

The country's auto industry kept steady growth this year. In the first ten months, the auto sector rolled out 4.619 million cars, up by 9.18 percent over 2004. Meanwhile 4.588 million cars were sold in the domestic market, marking an increase of 11 percent.

The profits, however, suffered a shrinkage of 39.29 percent to 36.135 billion yuan (about US$4.4 billion) despite a 7-percent increase in sales revenue in the first nine months.

Jia Xinguang, chief analyst of the China Auto Industry Consultant Firm, said that many auto companies have abandoned the high profits to secure their market share in the fierce competition, resulting in the profit decline.

"One the one hand, the consumption of cars was hindered by the deficient infrastructure and the price hike of energy. On the other hand, the competition became even fiercer with the presence of an increasing number of auto companies," said Jia.

According to the quoted prices, many dealers lowered the price of all types of cars in November to stimulate the flow of capital.

Insiders say the cars on sale were mostly produced in 2003 or have gloomy sales record in the past ten months.

A web-based survey showed that some companies such as Chery and Guangzhou Honda have already completed their annual sales plan, while some others, for example Shanghai Volkswagen, have experienced difficulties in fulfilling their scheme.

Experts estimate that with an annual growth rate of 12 to 15 percent, China's overall vehicle manufacturing volume will reach 5 million by 2008 and the price competition may last for years.

(Xinhua News Agency December 2, 2005)

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