Chinese carmakers also seek government aid
Caught in a slowdown, they urge policy changes rather than bailouts. Some are deferring export plans and cutting their costs.
Reporting from Shanghai — America's Big Three aren't the only carmakers turning to government with hat in hand.
Hit by a dramatic slowdown in sales, Chinese auto executives are cutting production, shelving plans to export to the U.S. and, a la Detroit, looking to Beijing for a little help.
Unlike the heads of General Motors Corp., Ford Motor Co. and Chrysler, who were in Washington this week pleading for $25 billion in aid, Chinese automakers generally aren't in dire financial straits. Rather than begging for cash or loans, Chinese managers say, they're pushing for policy changes, such as lower consumption taxes and pump prices, that might help jump-start sales.
Government needs to "provide an environment to encourage people to buy cars," said Cui Yizhang, marketing director at JAC Motors, a commercial vehicle maker in Anhui province.
In the interim, Cui said, JAC is tightening its belt. Production employees' work has been cut to three to four days a week from six plus daily overtime earlier in the year. The company has slashed salaries of high-ranking executives 40% and those of middle managers 20%.
For most of the last several years, China's auto market was booming, with annual sales volume growth often exceeding 20%.
But with sagging stock and property markets -- not to mention a global economy turned upside-down -- consumers started to pull back on purchases in the spring.
Sales in August and September fell from year-ago levels, and despite a 3% rebound in October, analysts are forecasting no growth next year.
GM and Ford's sales in China have slipped more than average, according to J.D. Power & Associates.
A few Chinese carmakers such as Shenzhen-based BYD Auto, which recently got an infusion of $230 million from investor Warren Buffett, are continuing to show solid growth in China, as are some foreign brands including Toyota Motor Corp. and Nissan Motor Co.
But overall, the downshift in China's car market is affecting domestic sales as well as exports, forcing manufacturers to pull back on their once-ambitious plans for international expansion. The global financial crisis already has contributed to a sharp slowdown in Chinese vehicle shipments to countries such as Russia and Ukraine, its top two overseas markets.
At home, competition has intensified as domestic and foreign carmakers deal with bulging inventory and major production cuts.
