CHINA, where auto plants are running at about 70 percent of their potential, said yesterday that vehicle export growth slowed in the first half, stoking concerns about excess capacity in the world's second-largest car market.

 

Exports rose 59 percent to 388,000 vehicles after almost doubling a year earlier, Fu Peizhao, an official at the China Chamber of Commerce for the Import & Export of Machinery & Electronic Products, said yesterday.

 

Chinese car makers have boosted exports as investments totaling at least US$20 billion by General Motors Corp, Toyota Motor Corp and other overseas makers have helped cause a rising stockpile of unsold vehicles and falling prices in the domestic market.

 

First-half exports also slowed on natural disasters and because of China's attempt to cool its economy, Bloomberg News reported.

 

"Exports are an important channel for auto makers to digest excess capacity, especially truck makers," said Li Dan, an analyst at China Galaxy Securities Co in Beijing. "Auto makers have expanded quickly because of the domestic sales growth."

 

China's exports of completed trucks rose 46 percent in the first half to 151,500, Fu said. Car exports doubled to 133,000. The total figure also includes sales of knock-down components and of chassis installed with engines.

 

The value of total exports rose 85 percent from a year earlier to US$5 billion, Fu said. The average price per vehicle climbed 16 percent to US$12,900. The numbers include vehicles made by overseas car makers in China.

 

"Tight monetary policies are making it difficult for auto makers to find capital and that led to the decline in exports," Fu said.

 

Concerns about excess capacity and falling prices have caused SAIC Motor Corp, China's largest auto maker, to plunge 70 percent this year in Shanghai trading.

From: Shanghai Daily