Editor's Note
An imposing picture of the overseas development of Chinese car companies is slowly unfolding. Thanks to the first-mover advantage and rapid development in the field of new energy vehicles, coupled with the agile grasp of market opportunities, Chinese car companies have entered a new stage of "going out", and the Chinese experience based on the manufacturing highland has been quickly copied to all parts of the world, and Chinese cars have been updated from "low quality and low price" to high-quality, high-tech, high-intelligence endorsements, and driven the international image of China's manufacturing to further jump.
The EADO PLUS model photographed in the Changan Automobile sales showroom in Saudi Dammam. Photo by Xinhua News Agency reporter Wang Haizhou
At present, the global layout of China's automobile industry has shown a high-speed growth trend. After more than ten years of deep cultivation, the way of Chinese car companies' independent brands going overseas has gradually evolved from a simple export trade model to a "local conditions" model of overseas factories, local procurement of parts, production and sales. These measures have brought about the outstanding performance of China's independent brand car exports: in 2021, China's independent brand car exports exceeded 2 million for the first time, achieving a breakthrough that has been hovering around 1 million for many years; driven by factors such as the favor of new energy vehicles and the good export market, the market share of Chinese brand cars in 2021 has exceeded 44%, close to the best level in history.
Upgrade the upstream and downstream of the industrial chain
SAIC Motor is an exemplary pacesetter in its ability to open up overseas markets and integrate global resources. SAIC has established three overseas manufacturing bases in Thailand, Indonesia and India, as well as a KD (bulk assembly) plant in Pakistan; three innovation and R&D centers in Silicon Valley, Tel Aviv, Israel and London, England; and set up a number of regional marketing service centers in Europe, South America, the Middle East, North Africa, Australia and New Zealand and ASEAN, and built nearly 810 overseas marketing service outlets, which have formed 9 "scale-level" in Thailand, the United Kingdom, the European Union, Indonesia, Chile, Australia and New Zealand, the Middle East, India, and Egypt. Overseas markets. In addition, SAIC Anji Logistics has opened 4 of its own international shipping routes, and SAIC's Huayu Parts also has 95 bases overseas.
In January 2022, SAIC's overall overseas sales exceeded 65,000 units, an increase of 74.4% year-on-year, accounting for 40% of sales in developed markets such as Europe and Australia and New Zealand. SAIC, as China's first systematic, planned, and formed "going out" automotive enterprises, has established a set of R & D, marketing, logistics, parts, manufacturing, finance, second-hand cars as one of the automotive industry chain for the global market, the current products and services have landed in more than 80 countries and regions around the world, "every three Chinese cars sold overseas, one is made by SAIC Motor.".
In 2021, SAIC motor achieved sales of 697,000 units in overseas markets, setting a new record with a year-on-year growth rate of 78.93%. Among them, as the champion holder of China's single-brand overseas sales record, SAIC Passenger Vehicles will have a total sales volume of 290,000 units in overseas markets in 2021, and has achieved good sales results in many mature markets such as Australia, New Zealand, and Europe. For example, the pure electric model MG EZS ranked in the top ten in the sales ranking of pure electric vehicles in Sweden and the United Kingdom from January to November 2021, while MG eHS entered the top five in the hybrid market ranking in Denmark.
Industry insiders pointed out that the reason why SAIC Passenger Vehicle's new energy products can become local mainstream brands in the European market is that on the one hand, Roewe and MG themselves have British genes and have relatively high brand recognition in Europe; on the other hand, thanks to the continuous improvement of SAIC Passenger Vehicles' design and sandian technology level in recent years, new energy models with high value and high technical reliability have the confidence to compete with other international brands in the European market. It is understood that at present, SAIC's passenger car products have entered 66 countries and regions around the world, and ranked in the top ten of a single brand in 17 countries and regions around the world, and are known as the Chinese brand of "mainland automobile electrification and intelligence walking in the forefront of the world".
Chery Group's overseas exports are also eye-catching, with overseas exports of 26,900 units in January 2022, an increase of 60.9% year-on-year; sales of new energy vehicles were 20,635 units, an increase of 179.6% year-on-year. Chery is one of the earliest Chinese auto brands to export overseas, and by 2021, Chery has gone overseas for 20 years, with overseas users exceeding 1.9 million, and ranking first in the Chinese brand passenger car market for 19 consecutive years.
Not only vehicle exports, Chery has also established global R&D bases in Europe, North America, the Middle East and Brazil, with 10 overseas factories, more than 1,500 dealers and service outlets, covering more than 70% of countries and regions along the "Belt and Road", with a total overseas production capacity of 200,000 vehicles per year. Chery's going to sea is not only the output of products and technology, but the comprehensive export of the upstream and downstream of the entire automotive industry chain, which has more comprehensive output of management methods, manufacturing processes and technical standards.
On February 8, Chery's "global car" OMODA 5 ushered in the first car off the production line in Wuhu. OMODA 5 meets the highest five-star standards for the Global New Vehicle Safety Rating (NCAP). OMODA 5 plans to be listed in overseas markets in the first half of 2022, including in Russia, South Africa, Chile and other countries and regions around the world, and then further exported to the European Union, Australia, New Zealand and other newly expanded overseas markets. From the current point of view, OMODA 5 has become the biggest booster to promote Chery's overseas strategy.
Analysts pointed out that Chery's sea is based on technology. Over the years, Chery has continuously deepened and accumulated in the fields of powertrain, three-electric technology and intelligence, and has carried out vehicle tests in many countries around the world, including Brazil, Saudi Arabia, Russia, etc., which have become the key to the continuous improvement of its overseas sales. "Taking the key technologies into their own hands, supplemented by uncompromising quality, is where the strength of Chinese brands going out lies." An industry insider said.
Implement a localization strategy
Great Wall Motor's overseas market in 2021 can be described as a frequent move, following the Tula plant in Russia, and then put into operation in June 2021, the second overseas plant, the Rayong plant in Thailand. With the commissioning of the Rayong plant, Great Wall's haval H6 HEV, HAVAL JOLION HEV and other new products have been successfully localized, laying the foundation for its further deepening of the Thai and ASEAN markets.
In the South American market, Great Wall Motors and Daimler Group signed an agreement to formally acquire Daimler's Plant in Iracemapolis, Brazil, which is another major move after Great Wall Motors' acquisition of GM's Tarigan plant in India and Rayong plant in Thailand, which is expected to be put into operation in the second half of 2023, with an annual production capacity of 100,000 units and will radiate throughout Latin America. According to the Core Market Strategy for Brazil released by Great Wall Motors, it will invest more than BRL 10 billion (about 11.5 billion yuan) in the next 10 years to deepen the layout of the local industrial chain, and plans to launch 10 new electrification products within three years, aiming to become the leading brand of new energy vehicles in the Brazilian market.
In the European market, Great Wall Motor officially opened a German subsidiary and a European headquarters in Munich, Germany, in November 2021. According to the plan, the Great Wall Motor Brand Experience Center will open in Munich and Berlin in 2022, WEY Coffee and ORA Cat are also about to open pre-sales, and the first models are expected to be delivered in the first half of 2022.
Up to now, Great Wall Motor has formed 13 domestic full-process vehicle production bases, 4 overseas full-process production bases and 5 overseas KD factories in the world. With the gradual completion of these production bases, Great Wall Motor's globalization strategy will continue to accelerate.
According to the data, in 2021, Great Wall Motor sold 143,000 vehicles overseas, an increase of 103.7% year-on-year, a record high, and the growth rate of overseas sales was almost 7 times the overall sales growth rate, while the current proportion of total sales was only 11.1%. Great Wall Motor's cumulative overseas sales have exceeded 900,000 vehicles, and the complete vehicles have been exported to more than 170 countries and regions, which has great room for improvement in overseas markets. Among them, in the Russian market, Great Wall Motors has ranked in the TOP3 of the SUV market; in the Australian and New Zealand markets, Great Wall Motors has become the fastest growing Chinese brand in local sales; in overseas markets such as South Africa, Saudi Arabia, and Chile, Great Wall Motors has also continued to maintain its leading position. According to the plan, Great Wall Motor will also build new KD plants in Egypt, Pakistan and other regions to further enrich the company's global manufacturing capabilities and support the delivery of a number of hot products overseas. Auto industry analysts believe that Great Wall Motors is competitive in overseas markets, especially in the field of SUVs has many years of experience, and the Middle East, Eastern Europe and other markets are more favorable to SUV models, so Great Wall Motors is also continuing to expand overseas factory production capacity and market share.
People look at cars at the Geely car sales point in Tel Aviv, Israel. Xinhua News Agency (Photo by Jill Cohen Magen)
Geely is also an active practitioner of global layout. In 2021, Geely Automobile's cumulative export volume reached 115,000 units, an increase of 58% year-on-year. At present, Geely has a global presence in 28 countries and regions, with 227 overseas sales and after-sales outlets. With the enrichment of the lineup of high-end new energy brand Krypton and the continuous increase in sales of Lynk & Co in the European market, Geely's overseas business territory will be further expanded.
In November 2021, Lynk & Co announced the official landing of the Asia-Pacific Plan in Kuwait, which has become another key initiative in its globalization. In the next step, Lynk & Co will also successively enter the United Arab Emirates, Bahrain, Saudi Arabia and other countries and regions, and will deeply layout Russia, Malaysia, Australia, New Zealand and other markets.
Not only that, in the face of the severe epidemic situation overseas, Geely is also actively implementing the localization strategy. As an iconic malaysian automobile enterprise, Proton Motors has a wide range of brands and market influence in the Southeast Asian market. Since the acquisition of 49.9% of the shares of Proton Automobile in 2017, Geely has transported advanced products, technologies, equipment, standards and talents to Malaysia, from the initial "going out" based solely on trade and product export sales, and gradually realized the "walking in" of local production and operation, and truly took root in the local area. In October 2021, Geely released the "Smart Geely 2025 Strategy" and the "Jiuda Longwan Action" to achieve technology going to sea, and plans to reach 600,000 overseas sales by 2025. According to the plan, Geely will focus on eastern Europe, the Middle East, Southeast Asia, Africa, South America and other countries and regions along the "Belt and Road". Not long ago, Geely's layout in Southeast Asia fell another way, signing new contracts in the Laos market and launching business in Chile, Egypt, Ukraine, Bahrain and other markets.
Unlike other car companies, 90% of Changan Automobile's overseas exports come from the "Belt and Road" countries and regions, such as saudi arabia, Pakistan and other places, Changan Automobile has squeezed into the top five in the local automobile market sales, and ranked first in the local market For Chinese brand exports.
In 2021, Master Changan, a joint venture company jointly established by Changan Automobile and Pakistan's Master Motors, sold 18,000 vehicles, an increase of 293% year-on-year, ranking first in local Chinese brand exports and fifth in the world. In the future, Changan Automobile strives to build Pakistan into its new 50,000-vehicle core market overseas. According to reports, Master Changan has been established for 4 years, and Changan Automobile currently has more than 20 4S sales channels in Pakistan, covering 10 key cities such as Karachi, Islamabad and Lahore.
Changan Automobile said that in the future, it will continue to keep up with the pace of national "Belt and Road" development, further accelerate the layout of overseas bases from the perspective of globalization, maximize the use of global resource endowments, and form a global advantage. At the same time, in line with the development trend of intelligentization and electrification of the global automobile industry, we will increase investment in product research and development, localized management, brand building, etc., and strive to achieve overseas sales of 400,000 vehicles in 2025.
Not only traditional car companies, the new car-making force Weilai Automobile will also provide full-system services in four European countries after Norway; Nezha Automobile has also released a right-hand-driven version of Nezha V for overseas markets, which is expected to officially open the expansion and layout of the Southeast Asian market in the first half of 2022, opening a new journey of Nezha Automobile's global development, and Nezha S, which represents Nezha Automobile's future intelligent exploration, will also fully enter the European market after listing at the end of 2022.
RCEP brings policy to the east wind
The overall trend of mainland automobile exports in 2021 shows several major highlights. First of all, the exports of Chinese brand automobile enterprises have shown rapid growth. Among the top ten export enterprises, compared with the same period last year, 9 Chinese brand automobile companies showed rapid growth, of which 4 enterprises exported more than 100%.
At the same time, exports of passenger cars and commercial vehicles have achieved rapid growth. Passenger car exports increased by 1.1 times, of which SUVs dominated the absolute dominance, reflecting the competitive advantage of Chinese brand SUVs. Exports of commercial vehicles increased by 70.7%, and passenger cars and trucks showed rapid growth. In addition, the export of new energy vehicles showed explosive growth. In 2021, the export of new energy vehicles will be 310,000 units, an increase of 3 times year-on-year, and the European market has become one of the main incremental markets, mainly concentrated in Belgium, the United Kingdom, Germany, France, Norway and other markets, reflecting the international competitive advantage of China's new energy vehicles.
It is worth noting that behind the rapid growth of China's independent brand car exports, the direct investment model has played an important role. Chinese car companies such as SAIC Motor, Great Wall Motor, and Geely Automobile have laid out factories overseas, supporting the landing and rooting of Chinese brands overseas and laying a solid foundation for subsequent growth. According to the China Association of Automobile Manufacturers, the growth rate of mainland automobile exports will be about 20% in 2022.
Chinese car companies have made remarkable achievements in overseas markets, mainly due to the following reasons: First, the complex overseas epidemic situation has led to the suspension of a large number of factories, and some of the production capacity that could have been completed by the local government has shifted to China, which has taken the lead in resuming work and production, while the mainland's own brand cars have been deeply cultivating the overseas market for many years, and are now gradually entering the harvest period and seizing market opportunities in the epidemic.
Secondly, the European Union has opened the strictest carbon emission regulations in history since 2020, the transition period is only one year, and European countries have increased or expanded the subsidy amount and scope of new energy vehicles, which has quickly become the world's largest new energy vehicle market, while China's own brand cars rely on excellent technology and quality to undertake the explosive growth demand of the European new energy vehicle market. Among them, SAIC Maxus MAXUS EV30 new energy vehicles began to export to Norway in alpine regions; the European version of Aichi U5 was sent from Shanghai to Belgium and France; Geely's PoleStar brand new energy vehicles also opened the global delivery curtain, exporting 1285 units to Europe in June 2020 alone.
At the same time, the continuous shortage of chips affects the production rhythm of overseas car companies, while the supply of mainland independent brand chips is more stable, which can effectively resolve the pressure of chip shortage, thus bringing more opportunities for independent brand cars to go overseas. With the shortcomings of quality, technology and other aspects being effectively compensated, some boutique models of independent brands have been recognized by more and more overseas consumers, which is also one of the important factors for the growth of overseas market share of independent brands.
On New Year's Day 2022, the Regional Comprehensive Economic Partnership (RCEP) has officially entered into force, and on January 1, 2022, Brunei, Cambodia, Laos, Singapore, Thailand, Vietnam, ASEAN six countries and China, Japan, New Zealand, Australia became the first countries to enter into force of RCEP, RCEP entered into force for South Korea on February 1, and RCEP will enter into force for Malaysia from March 18. After the RCEP came into effect, more than 90% of the trade in goods in the region eventually achieved zero tariffs. This also means that the auto products between member countries will be free trade to a large extent, which will have a great boost to the mainland's auto import and export business, and the preferred destinations for auto companies' overseas layout will become more clear.
It is worth noting that many RCEP member countries are a vital part of the overseas layout of Chinese car companies, and the arrival of RCEP will make the operation and development of Chinese car companies in these countries more smooth. Cui Dongshu, secretary general of the Association, said in an interview that RCEP has extremely positive significance for Chinese auto companies. After the RCEP takes effect, it can provide a good comprehensive guarantee for Chinese car companies to go to sea, which is more conducive to the local localization development of car companies.
At present, the mainland is in the transition stage from an automobile power to an automobile power, with a relatively low export share and a broad space for automobile exports. Judging from the current export situation of head car companies, the growth trend of overall sales has laid a solid foundation for subsequent development. In the future, more Chinese car companies will go out and make the automobile industry a powerful business card for China to face the world.