The Honda Fit delivers the best value of any model on the market, declares Consumer Reports.
With the domestic market starting to show signs of a slowdown perhaps it should come as no surprise that China’s automakers are ramping up plans to export product to other parts of Asia, Europe and now, even North America.
Honda will soon begin shipping the subcompact Fit from its plant in southern China to Canada – though there are currently no plans to bring any of those products into the U.S. That’s not necessarily surprising as that could generate a harsh response considering China this month said it plans to enact stiff no tariffs on American-made automobiles.
Honda isn’t alone. Mercedes-Benz and BMW have also announced plans to export product from China. And some of that country’s local makers are openly laying out plans for a global assault – including the battery car maker BYD, which recently opened up an office in Los Angeles.
Industry experts have long expected China to eventually become a player in the increasingly global auto export market. But in recent years, with domestic sales increasing at double-digit rates, manufacturers had trouble keeping up with local demand.
This year, however, that’s begun to change. With the Chinese government worrying about inflation and curbing incentive programs, sales have begun to slip and recent forecasts indicate the pace of growth might actually slip behind that of the recovering U.S. automotive market.
With automakers unlikely to cut back on investment plans – at least without a wholesale decline in the Chinese market – they may be under increasing pressure to divert production to other parts of the world.
Meanwhile, Japanese makers, such as Honda, are desperate to find ways to shift production out of their own home market – where the strong yen has made it nearly impossible to turn a profit. That’s especially the case with small models like Fit, which didn’t have much of a built-in profit to begin with.
Honda has actually been one of the most aggressive players in China when it comes to seeking out export opportunities, one of its plants there specifically devoted to foreign markets. With European consumers willing to accept those products the maker is betting they’ll be welcome in North America, as well. At least in Canada, anyway, where a small number of Honda Fit hatchbacks are being earmarked.
But the New York Times notes that project may be short-lived, as Honda is expecting its production base in Mexico to handle the Fit. They’ll be exported North of the Border to the U.S. – and very likely would also go to Canada, replacing the Chinese-made subcompacts.
But barring another significant surge in home market sales, expect to see more Chinese exports from other brands. Beijing Benz, a Sino-German joint venture, recently began production of E-Class sedans for overseas markets.
Only weeks earlier, BMW became the first major luxury marque to begin overseas exports –sourcing the new 5-Series model from its joint venture with Chinese maker Brilliance Automotive. They’ll be supplying dealers in the Middle East.
As for the U.S., a number of Chinese local makers have expressed export plans but so far none have completed the process by actually setting up a dealer network. Possibly the furthest along is BYD, which wants to focus on plug-in hybrids and pure battery-electric vehicles. The maker – which is partially owned by American mega-investor Warren Buffett’s Berkshire Hathaway – opened a new U.S. office in L.A. several months ago that could also serve as its first showroom.
(For more on BYD’s U.S. plans, Click Here.)
But China could also find itself less than welcome in the American market. As TheDetroitBureau.com reported, it is responding to new American tariffs on Chinese-made tires by threatening to retaliate with steep tariffs on American-made autos. The move would affect not only General Motors and Chrysler but also cars made at the U.S. plants of Mercedes and BMW.
(Click Here for that report.)