This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Dead End for Autos Exported From China?

Stocks in this article: TM F HMC GM NSANY

BEIJING (TheStreet) -- The Chinese export juggernaut appears to be running out of road for the country's automakers.

Demand has been falling for more than a year in emerging market countries that import most of the Geely sedans, Great Wall SUVs, Chery compacts and other vehicles shipped abroad from auto factories in China.

This slowdown could be good news for the Chinese automakers' big-name competitors in emerging markets such as Toyota (TM), Ford (F) and Honda (HMC). But it's another loss of face for Chinese auto companies that are already losing to foreign rivals at home.

Overseas shipments of Chinese passenger cars and commercial vehicles fell to 977,300 units last year after topping a record 1.05 million units in 2012, according to the China Association of Automobile Manufacturers (CAAM). The export slide continued in January, with outbound shipments declining 7% year-on-year to about 68,000 units.

Some analysts have pegged softening overseas demand to the Chinese yuan's steady appreciation against currencies in the automakers' most important foreign markets, none of which are in Europe or North America. The rising yuan has made Chinese cars more expensive in Latin America and Africa, for example, where consumers are particularly sensitive to prices.

Indeed, the yuan's value has climbed about 20% against both the Russia ruble and the Chilean peso over the past year. Russia is the second-largest foreign market, after Algeria, and Chile the third-largest for cars made in China. Other leading destinations include Iran, Peru and Colombia. Chinese vehicles are sold in about 100 countries worldwide.

"Exports weakened as the yuan appreciated," according to a Macquarie Securities analysis released Friday. "We believe the appreciation of the yuan has gradually eroded the competitiveness of Chinese autos in emerging markets, the major export destination for China original-equipment manufacturers."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,678.70 +6.10 0.03%
S&P 500 2,057.09 +5.27 0.26%
NASDAQ 4,771.7630 +13.8840 0.29%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs