Chinese vehicle exports fall on weak emerging market demand

China’s global vehicle ambitions may have been dampened as exports decline for the first time in five years.

he emerging superpower exported 84,400 cars during the month of June, one fifth lower than in the same period last year. The slump was preceded by a 16% drop in May export sales – the first year-on-year drop since the height of the financial crisis in 2008.

Slow exports were due, in part, to sluggish demand from many of China’s key developing markets, such as Iraq, Vietnam and Turkey, all of which are currently experiencing some degree of social unrest. Modest global growth has also had a negative impact on sales of Chinese vehicles overseas.

Data from the China Association of Automobile Manufacturers showed Chinese car makers captured 38% of the nation’s passenger vehicle sales in June, down from 47% at the end of last year. Slow domestic growth and weak exports could be problematic for China’s automakers, both state-owned and private.

Many of the nation’s 140 domestic automakers are facing tougher competition at home and abroad, and are beginning to consolidate in an effort to pool resources and gain competitive advantage.

Beijing Automotive Industry Group Co (BAIC) has announced plans to acquire one, or perhaps two state-owned automakers in the second half of 2013. The Beijing-based automaker is following the government’s suggestions to consolidate the nation’s fragmented auto industry.