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Foreign automakers feel force of Wednesday's explosions in Tianjin

By Du Xiaoying | China Daily | Updated: 2015-08-17 09:45

Foreign automakers feel force of Wednesday's explosions in Tianjin

Companies waiting for access to determine scale of damage, Du Xiaoying reports

The massive explosions in the port of Tianjin on Wednesday night destroyed thousands of imported cars that were waiting to be distributed.

As the fourth-largest port in the country and the one closest to the capital, Tianjin is an important import hub for many international vehicle manufacturers.

A dozen companies were affected by the explosions, including Volkswagen, Renault, and Toyota, and the total loss for the automakers concerned has been estimated at more than 2 billion yuan ($312.5 million). Photos from the site show row after row of burnt and damaged cars. However, there is no precise figure for the number of cars destroyed by the blasts, as access to area is still restricted for safety reasons.

Renault and Volkswagen, which suffered the most losses, according to caijing.com.cn, have made official announcements, as have FAW Toyota and Mitsubishi.

Renault announced on Thursday that about 1,500 of its cars were damaged in the blasts. Zhang Le, Renault's public relations officer told China Daily that the damaged vehicles are mainly Koleos, the company's SUV model.

Volkswagen said on Thursday that some of its cars had been damaged, but it was still trying to verify the number. Apart from Tianjin, the company also imports cars through Shanghai and Guangzhou, and it said it will make sure its dealers receive deliveries and it hopes not to inconvenience customers.

Volkswagen reportedly lost 2,748 units of imported models, such as the New Beetle, Golf and Tiguan according to www.163.com on Thursday.

FAW Toyota said on Friday that both its staff and production lines were not harmed by the blasts, although the office area and the windows of its factory were damaged, as well as some of its vehicles parked outside the factory.

Mitsubishi said on Friday that about 600 units of its cars in Tianjin port may have been damaged by the blasts.

Hyundai lost 3,950 units cars, the media reported on Saturday.

Other brands, such as BMW, Lexus, and Infiniti, were also affected by the blast.

Yang Lin from Lexus public relations department said less than 1,000 units of Lexus cars were in Tianjin port at the time, but some of them had been damaged by the blasts.

According to National Business Daily on Friday, Jaguar Land Rover also had cars damaged by the explosions, but it is still counting the number.

Impact on dealers

China's auto industry has been experiencing slower growth year, and the Tianjin explosions have added to the pressure on dealers. According to the China Automobile Dealers Association, the vehicle inventory alert index has been above the alert level for months. In July, the inventory was 53.4 percent, above the alert level of 50 percent.

"This worsens the already grave situation. It is not easy to sell cars now. The whole market is not good. And the situation for dealers is unstable," said a senior employee from a dealership deeply affected by the blasts, who prefered to be unnamed and did not want title and company published.

According to this person, at present no one knows whether the cars destroyed in Tianjin are the manufacturers or ones the dealer had already paid for, and the dealership may not necessarily be able to get the full amount of insurance compensation, because the cars are insured by the vehicle producers, not them.

"If the insurance company doesn't give total compensation, we will have to hope the automaker offers some subsidies. If the automaker doesn't give subsidies, we will have to bear it ourselves," the person said.

Contact the writer at duxiaoying1@chinadaily.com.cn

 Foreign automakers feel force of Wednesday's explosions in Tianjin

Scenes of the damage caused by the explosions in Tianjin port. Photos by Zhu Xingxin / China Daily

(China Daily 08/17/2015 page18)

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