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China's biggest vehicle exporter sees weaker yuan boosting sales
[SHANGHAI] Chery Automobile Co, China's biggest vehicle exporter, said the move to devalue the yuan by the most in two decades will help its sales overseas, predicting shipments will rise by 20 per cent this year.
"The weakening yuan is good for us," Yin Tongyue, chairman of Chery Auto, said in an interview in Beijing. "We support it."
Chinese authorities had been propping up the yuan to deter capital outflows, protect foreign-currency borrowers and make a case for official reserve status at the International Monetary Fund. The move to devalue the currency will help the country's auto exporters by making their products cheaper. Overseas car shipments from China have shrunk in the last two years, and are down 14 per cent in the first six months.
The central bank on Tuesday cut its daily reference rate by 1.9 per cent, triggering the yuan's biggest one-day drop since China unified official and market exchange rates in January 1994. The People's Bank of China called the change a one-time adjustment and said it will strengthen the market's ability to determine the daily fixing.
Chery is also confident of demand in Iran after international sanctions are fully lifted by the year-end, said Yin, who had just returned from a trip to the country.
The carmaker is targeting total exports of 128,000 units this year, and sold 50,130 in the first six months.