BEIJING: In the first 10 months of this year, China exported more vehicles than it imported - a milestone for the local industry and the country's ambitions to become a leading player in the global car market. According to statistics from China's Ministry of Commerce, vehicle exports as of the end of October rose to 135,000 units, up 134 per cent compared with the same period of last year, while imports slowed 12 per cent to 128,000. However, analysts point out that these figures are low compared with other low-cost producing countries and that in value terms the balance is still skewed towards imports. Most of China's exports go to countries such as Syria, Vietnam and Algeria, while a large proportion of imports are luxury brands. The latest numbers suggest overseas demand for Chinese vehicles, particularly cheap trucks, is strong while domestic production of higher-end car models is gradually replacing imports. Some analysts believe this trend will continue through next year. "Exports will surely continue to increase," said Yale Zhang, a director of CSM Asia, a car industry consultancy. He said the quality of China's small to medium-sized trucks was improving and most ended up in countries in the Middle East, south-east Asia and Africa. Pick-ups and light truck types accounted for 59 per cent of exports in this period while passenger cars accounted for 16 per cent, said the ministry. Mr Zhang pointed out that some domestic-made trucks sold for between Rmb50,OOO and Rmb70,OOO (US$8,600), only a third of the price of an American-made truck. And he predicted China would start exporting mass quantities of cheap passenger cars in 2007, when domestic carmaker Chery is expected to start marketing models to US buyers. "The future is America [for Chinese vehicle exports]," he said. Despite the aspirations of China's carmakers, many of which have partnered with global multinationals to make cars for domestic consumption, industry analysts and government officials are concerned about a looming problem with overcapacity. Ma Kai, head of the National Development and Reform Commission, the influential economic planning body, recently said the automotive sector was one of a few that risked being stuck with a significant amount of excess production. Mr Ma cautioned that the number of vehicles being manufactured and the number of car plants being built might not be in line with demand, and this could be "exacerbated" next year. While China-based carmakers are ramping up production for the domestic and foreign markets, there have been signs of slowing demand for imported vehicles, which usually only the nation's elite can afford.
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