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BIZCHINA> Top Biz News
Local sales offset Lifan export loss
By Jiang Wei (China Daily)
Updated: 2009-04-28 08:19

Local sales offset Lifan export loss

Models crowd around a Lifan Group 320 vehicle at the 2009 Shanghai auto show on April 21. [Bloomberg News]


Lifan Industry (Group), a privately-owned motorcycle and car producer, saw its total exports decrease by 40 percent year-on-year in the first quarter this year although booming domestic sales offset most of the overseas losses.

Lifan's exports of sedans alone declined by up to 80 percent during the same period, the company's President Yin Mingshan yesterday told reporters on the sidelines of the China Institute Executive Summit, attributing the plunge to the renminbi's appreciation against non-dollar currencies.

"Although the renminbi had a flat exchange rate with the US dollar, it increased largely against currencies such as the euro, pound and rouble in the past half-year. This has caused a fall in our exports to non-dollar countries," Yin, the founder and head of the group, said.

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Lifan sold more in its home market during the same period, roughly enough to offset its losses abroad. "China's domestic automobile market has walked out of the shadow of the financial crisis," Yin said.

China's passenger car sales rebounded by 10 percent to hit a monthly high of 1.1 million units in March, outpacing sales in the United States for the third straight month. Experts said the nation has been the first to show improvement from the devastating industry downturn that began in the second half of last year as it benefited from government incentives to boost automobile consumption.

He urged the government to release a detailed stimulus plan for the motorcycle industry to encourage farmers to buy motorcycles. A similar plan for the automobile sector, which subsidizes farmers by up to 13 percent for each automobile purchased, has been put in place and has led to a surge in automobile sales in rural areas, but the plan for the motorcycle sector has been postponed.

He also expected the country to expand the coverage of export insurance in a bid to help overseas buyers address financing difficulties.

"It is the most effective way to boost exports," Yin said, adding he has submitted a proposal to the central government in this regard.

"Exports in the second quarter should be better than the first quarter but is unlikely to recover to the level of last year's," Yin said. "Recovery signs may be seen in the second half of this year."

 


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