The IMPACT OF JOINING WTO ON

CHINA’S AUTO INDUSTRY

Outline

• 1. WTO main principle on China’s auto imports

• 2. How do China’s auto industries really work under the principles.

• 3. Prospect for China’s auto industries development.

WTO MAIN PRINCIPLE ON CHINA’S AUTO IMPORTS

Part 1

220% to 25%Unforgettable Memory

China's Auto Import Tariffs

19861988

19901992

19941996

19982000

20022004

20062008

0%

50%

100%

150%

200%

250%1993 High-emission Auto 220%

2001 High-emission Auto 80%

2008 High-emission Auto 25%

Low-emission AutoHigh-emission Auto

Gloomy Predictions…Lower tariff

Foreign autos get more competitive power

Gain more China’s auto market

Domestic carmaker are difficult to survive

57% of the experts believe that auto industry will receive

enormous impacts of joining WTO.

Is WTO a Coming Wolf?

The truth is the opposite

HOW DO CHINA’S AUTO INDUSTRIES REALLY

WORK UNDER THE PRINCIPLES?

Part 2

In fact…

In 2005, Chinese car exports top imports

Exports more than doubled to 135,000 units between January and October while imports fell 1.6% to 128,000

The percentage of imported car in China’s auto market

2001 6.0%

2007 3.7%

In 2009, China is the world’s largest car producing country.

Thus, joining WTO may have some positive impacts on the industry

Positive Impacts

Structure

Structure

• To accelerate the auto to adjust the industrial and product structure

• After the Changan Automotive adjust it’s structure in 2001,the sales is growing 15% on average

Strategy

Dongfeng Citroen

FAW-Volkswagen

Hyundai-Beijing

Changan Mazda

Cooperation

Dongfeng Citroen

The average growth rate of

its market share is 10%

FAW-Volkswagen

The growth of production and selling is 30%-50% per year

Hyundai-Beijing

After the cooperation of Beijing

Automotive Industry and Hyundai , it

growth well even during the market’s

10 year dismal

Changan Mazda

The average growth rate on sales after the join of FAW is

10%

Policies

• China’s entry into the WTO means the competition between China’s car companies and foreign counterparts will be more intense.

• Thus, some supporting policies come on. For

example, purchase tax is 8.547% on domestic cars and 10% on foreign autos

PROSPECT FOR CHINA’S AUTO INDUSTRIES

DEVELOPMENT.

Part 3

Policies'

protection and encour

age

Corporation’s develop new auto

Maintain the ascending

trend

Policies' protection and encourage

Policies•Maintain Tariff Rate

•Encourage Auto Export

•Stimulate Consumption

Corporation’s develop new auto

• Develop New Energy Vehicle

• Manufacture Luxury Car

Corporations

Review

• 1. WTO main principle on China’s auto imports

• 2. How do China’s auto industries really work under the principles.

• 3. Prospect for China’s auto industries development.

Thanks

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Reference

http://chintena.files.wordpress.com/2009/04/246-wto.jpghttp://www.hiyp.com.tw/news/html/6338.htmlhttp://www.chinadaily.com.cn/china/2009-07/09/content_8401265.htmhttp://www.chinapress.net/newscenter/2007-09/23/content_17404.htmhttp://news.bbc.co.uk/2/hi/business/4502098.stmhttp://wheels.lowyat.net/2009/07/10/china-is-worlds-largest-car-producing-country/