Since China and ASEAN have established close free trade relations this year, in just a few months, the China-ASEAN Free Trade Area has begun to show its power. According to data from the Ministry of Commerce, ASEAN has become China's third largest export market and the fourth largest trading partner. China's auto exports to ASEAN are also full of vitality, especially the export prospects of commercial vehicles are very promising.
According to customs statistics, in the first quarter, China exported a total of 12,866 vehicles to 10 ASEAN countries, which represented a year-on-year increase of 120%, which was much higher than the 52% increase in auto exports, and accounted for 12% of the country’s total automobile exports.
In order to protect the domestic automobile industry, many countries in ASEAN have not only imposed high tariffs on automobile imports for many years, but also set up many non-tariff trade barriers. Some countries also implement import licensing systems. For example, Indonesia has imposed an import tariff of 65% on cars with a displacement of 1.5 liters or less, and a 70% import duty on cars of 1.5 to 3.0 liters. Prior to 2005, Malaysia imposed an import tariff of up to 300% on vehicles with a displacement of more than 3.0 liters. These tariff and non-tariff trade barriers have seriously hindered the entry of automakers in other countries into the local market.
According to an agreement reached between China and 10 ASEAN countries, starting from January 1 this year, 90% of China’s old ASEAN member countries (Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand) will achieve zero tariff; 2015 China and ASEAN’s four new member countries (Vietnam, Laos, Cambodia and Myanmar) will also achieve zero tariffs on 90% of their goods. Similarly, six old ASEAN member countries have reduced the import tariffs on automobiles and auto parts to zero since January 1 this year. This has led to the emergence of new business opportunities for China's auto companies that have grown and expanded in the domestic market. Based on this, multinational auto companies have also expanded their production scale in ASEAN or built joint ventures.
The vast majority of Japanese, European, and American multinational auto companies have production bases in Southeast Asia, and China’s export of cars to ASEAN countries has no advantage in the short term. However, commercial vehicles in China have great potential in ASEAN. Statistics show that in recent years, most of the cars that China exports to ASEAN are commercial vehicles. In the first quarter of this year, China used a total of 10,783 vehicles for ASEAN exporters, which accounted for 84% of the total ASEAN auto exports. Last year, total sales of ASEAN's 10 countries were about 1.9 million, of which commercial vehicles accounted for 1/3.
In addition to Thailand, the production capacity of commercial vehicles in other ASEAN countries is negligible, and the variety of commercial vehicles produced in Thailand is very limited. Therefore, the establishment of the China-ASEAN Free Trade Area has provided China's commercial vehicle companies with a broad market prospect. China Quality News
View related topics: Commercial Vehicle Export Analysis
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