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."