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RMB devaluation promotes export of Chinese automakers
Post Time : 2015/8/24  Hits : 525

Chinese whole vehicles export quantity experienced consecutive drops in the first seven months, while in August the county’s currency RMB went through a sudden depreciation against US dollar, which might raise competitiveness of Chinese export vehicles for lower selling price.

During August 11 to 13, RMB to US dollar exchange rate had fallen by around 300 basis points, 4.66 percent devaluation degree.

Meanwhile, China Association of Automobile Manufactures released Chinese whole vehicle export figures of the first seven months of the year being 445,800 units, a 13.7 percent drop compared with the same period of last year.

In particular, passenger vehicle export decreased 16.1 percent to 253,700 units on a year-on-year basis. Commercial vehicles export dropped 10.4 percent from a year earlier to 192,100 units.

Some believe that weakening RMB will relatively strengthen the price advantage of Chinese export vehicles in foreign market, adding profits to Chinese export automakers. Other hold that RMB devaluation in the short term will raise Chinese automaker’s profits in oversea market, but it still needs a long time for the vehicle selling price to drop. The RMB depreciation will also influence Chinese automakers who have built plants in foreign countries.

For example, Chinese Lifan Motors has established seven factories overseas, thus export vehicles account for only a small part of its foreign selling productions. And its sales in foreign markets consist more than half of the company’s overall sales. Therefore the devaluation of RMB has only a little influence on the company’s export.

But for another Chinese automaker Geely, who mainly depends on export in foreign vehicle selling business, RMB devaluation will certainly do good to the price edge of its export vehicles. Additionally, Geely built oversea plants mainly for assembly, thus export spare parts will also bring more profit for the company due to weakening RMB.