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Bill's breakdown will have 'limited impact' on China

By Jiang Wei (China Daily)
Updated: 2008-12-13 08:29

The failure of a rescue package for the United States' "Big Three" automakers at the Senate will have limited impact on China's auto industry, analysts said on Friday.

The US Senate on Thursday thwarted the $14 billion bailout plan, which had been approved by the House of Representatives. It is expected to leave GM, Chrysler and Ford on the edge of bankruptcy and threaten millions of jobs.

However, the failure of the bill will have little effect on the operations of the multinationals' Chinese branches, Jia Xingguang, chief analyst with China National Automobile Industry Consulting and Developing Corp, said.

Joint ventures and wholly owned branches of GM and Ford operate well in China and are independent from their parent companies, he said.

Chrysler's capability and sales in China are much smaller than its EU and Japanese rivals.

Ford's luxury marque Volvo might be slightly affected if the parent company decides to sell the brand, but its sales in the Chinese market are limited, Jia said.

Zhong Shi, an independent auto industry analyst, said GM's and Ford's Chinese ventures have reached a certain scale and do not need further investment from their US headquarters.

Related readings:  World markets plunge as US auto bailout fails  Fallout from auto slump spells pain for Germany  $14B US auto bailout dies in Senate

China's exports of auto parts to the United States are likely to fall as a result of the US automakers' trouble, analysts have said.

In response to the failure of the bailout bill, auto-related shares fell sharply on the Shanghai stock market on Friday.

Fuyao Group Glass Industries, a supplier to Ford, dropped 7.06 percent to 4.61 yuan.

SAIC Motor, China's biggest carmaker, which has a major joint venture with GM, was down 4.72 percent at 6.06 yuan.