Quality assurance is presently the biggest challenge facing China's fast growing auto export, say industry insiders at the ongoing 2006 annual meeting of the Boao Forum for Asia.

With the constant expansion of China's auto-making industry, Chinese automobiles are marching quickly into the world market. In less than 15 years, China has risen from a sheer auto consumer toward one of the world's biggest automakers, said Kevin Wale, president and managing director of the General Motors China Group.

Government statistics show that in 2005, a total of 1,009 Chinese enterprises had auto export records in Chinese customs, up 43.1 percent year on year.

The China Association of Automobile Manufacturers predicts China's passenger vehicle sales to hit 4 million units this year, both at home and abroad, making it the second largest auto consumer in the world after the United States.

An earlier report said China aims to increase its car and auto parts exports by more than 40 percent annually to US$70 billion in 2010.

However, Yet Wale said China still needs to overcome many difficulties and challenges to become a real auto-making giant.

These include quality assurance, cost competitiveness, aftersale services, transportation and distribution, said Motor (China) Ltd chief executive Mei Wei Cheng.

Quality assurance, in particular, is found to be a major obstacle that hinders Chinese automakers from finding their niche in the international market, he said.

To that effect, many industry insiders attending the conference said Chinese businesses need to balance between good quality and competitive prices, as most auto exporters currently target the medium- and low-end markets and low prices.

Most of the auto business executives expressed confidence in China's auto-making industry, but warned Chinese automakers need to improve their aftersale services once their export expands.

The Chinese auto industry will continue to prosper in the coming decade, and Chinese businesses are expected to provide their customers with state-of-the-art technologies as well as quality products and services, said Katsumi Nakamura, president of Dongfeng Motor Co., Nissan Motor Co.'s joint venture in China.

In 2005, China's vehicle output grew 12.56 percent to 5.71 million units over the previous year, and sales of domestically made vehicles grew 13.54 percent to 5.76 million units, according to statistics from China Association of Automobile Manufacturers.

(Xinhua News Agency April 22, 2006)