Chinese car exports to Australia hit asbestos road bump
Australian distributor recalls thousands of Great Wall and Chery vehicles but impact not likely to be lasting
China's budding car export trade suffered a setback yesterday when an Australian distributor recalled 21,500 vehicles made by mainland carmaker Great Wall Motor and another 2,250 Chery Automobile vehicles over traces of asbestos found in their engines and exhausts.
Analysts said the recall should not have a wide impact on Chinese car exporters because most of their vehicles were sold to Algeria, Argentina, Russia and the Middle East, which do not have such stringent requirements on asbestos.
The Australian Competition and Consumer Commission said yesterday that the amount of carcinogenic substance found in the exhaust gaskets did not present any risk to consumers. But since the country has banned the use and import of products containing asbestos since 2004, the vehicles' distributor, Ateco Automotive, instructed all Chery and Great Wall dealers to stop sales of the affected vehicles, recall gaskets that were distributed as spares and advise car owners not to replace the gaskets themselves.
Australia and the European Union have a full ban on asbestos but other developed nations including the United States, Britain and New Zealand, only have a partial ban.
A spokesman for Great Wall Motor, the first and the largest Chinese car exporter to Australia, said it stopped using asbestos from March and would continue exporting cars to Australia.
According to a safety inspection report commissioned by the Australian government obtained by Great Wall, only traces of asbestos were spotted in the gaskets and the health risks they posed to car mechanics were "negligible".
Julian Yang, a car analyst from consultants Beijing Polk-Catarc, said the asbestos recall should have a minimal impact on Chinese carmakers.
"While the incident will cast a shadow on Great Wall's business in Australia, asbestos is in fact still used in many products even in developed nations, given its affordability and high resistance to heat and fire," Yang said.
"And, they are not the major export markets for mainland vehicles anyway."
The news nonetheless dragged down Hong Kong's car stocks yesterday. Great Wall led the fall to close 5.07 per cent lower at HK$16.48, while Dongfeng Motor was down 4.34 per cent and BYD fell 4.15 per cent.
China's carmakers exported a total of 400,100 vehicles valued at US$6.27 billion in the first half of this year, a year-on-year increase of 17.03 per cent and 36.48 per cent.