Will China become the export base of international auto giants?

Last year, General Motors and Honda Motor Co. continued to ship subcompact cars made in China overseas. Daimler and BMW also started exporting the extended four-door sedan during the year, while Volkswagen plans to build a car in Xinjiang to sell to neighboring Central Asian countries.

In the future we will see more international car companies exporting products from China. Despite this, the idea that China will become an export base for international brands remains unrealistic.

First, international brands have established a global production base, especially in mature markets such as Europe and North America.

This means that their exports from China will still be limited, and the export markets of the products are mainly other developing countries.

When we take a closer look at the export strategies of these international automakers, this becomes clear. Let's start with a luxury brand.

Because China prefers the extended luxury sedan, Mercedes-Benz, BMW and Audi all produce their own long-wheelbase sedan in China.

Jenny Gu, a Shanghai-based analyst at LMC Automotive, said that exporting long-wheelbase vehicles from China will be a trend for luxury brands.

For example, Daimler transported its extended 5-series sedan from China to the Middle East, while Mercedes-Benz is exporting its long-wheelbase E-class sedan to Colombia.

Because there is limited demand for extended saloons outside China, it is meaningless to build new assembly lines elsewhere. This is why BMW and Mercedes-Benz would rather export these cars from China.

Now let's take a look at mass market car manufacturers. Last year, General Motors exported 30,000 Chevrolet New Sioux subcompacts from China. These cars are mainly sold in countries such as Chile, Peru, Algeria and Iraq.

At the same time, Honda began exporting its Fit subcompacts to Canada in December. However, Honda will stop exporting from China after its Mexican assembly plant is put into production in 2014.

At the same time, Shanghai Volkswagen plans to build a final assembly plant in Xinjiang in northwestern China. The factory will transport some cars to Kazakhstan and Uzbekistan.

In all cases, foreign automakers are exporting cars from China to properly fill the product gap in their overseas markets.

If these companies are rational, they will not export too many cars from China, because doing so will hinder their existing models in other markets.