China's autos sail to sea: export blowouts cause global "panic"

China’s auto exports have never been as eye-catching as it is today.

According to data from the China Automobile Association, in July, a total of 365,600 self-owned brands of passenger cars were sold, a decrease of 18.14% from the previous quarter and a year-on-year decrease of 3.21%. The market share was even the lowest in recent years, only 36.13%;

In contrast, China’s auto exports in the first seven months amounted to 454,400 units, an increase of 57.30% year-on-year, and this year is expected to break through the highest record of auto exports. The increase in exports of Chery, Geely and other companies is close to 100%.

"China's auto export threat theory" once again spreads across the globe. Chrysler Group and Fiat CEO Malchone publicly stated that the Chinese company’s auto export program will pose a huge threat to European and North American car manufacturers, and “decisive battles” will be inevitable.

When the “freezing point” encounters a “boiling point”, is China's auto exports a “battle of life” for Chinese auto companies or is it still a beautiful “dream”?

The hidden trouble behind the export “blowout” has just been announced recently. Geely Automobile's semi-annual report shows that the company exported 13,385 vehicles in the first half of the year, a year-on-year increase of 93%. Coincidentally. In the first half of the year, Chery's total exports have reached 71,827, an increase of 88.5% year-on-year. JAC exported 35,500 vehicles, which was a 2.55-fold increase year-on-year.

China's auto exports have been very exciting for a time.

The Chinese government has also issued several documents to vigorously promote the export of the automotive industry. In October 2009, the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the General Administration of Customs, and the six ministries and commissions of the General Administration of Quality Supervision, Inspection and Quarantine jointly issued the "Opinions on Promoting the Sustainable and Healthy Development of China's Automobile Products Exports", stating that they will strive to achieve a Parts exports reached 85 billion U.S. dollars, an average annual increase of 20%. Recently, 11 ministries and commissions, including the Ministry of Commerce, jointly issued the “Opinions on Promoting the Sustainable and Healthy Development of Export of Electromechanical Products during the Twelfth Five-Year Plan,” and requested the expansion of the export of mechanical and electrical products with independent intellectual property rights and independent brands during the “Twelfth Five-Year Plan” period. The proportion of exports of self-owned brands of general trade machinery and electronic products has increased to 30%. Among them, the car ranked first in 25 key industries, can be described as a long way to go.

However, further analysis of the export of Chinese cars is not difficult to find, the proportion of exports in the overall sales of Chinese auto companies is not high, through the survey, in addition to the Chinese car exports the first Chery Automobile can reach about 30%, the Great Wall, Jianghuai, Geely The proportion is about 10%, and other companies are even lower.

Compared with other global markets, China's total vehicle exports in 2010 were US$7.329 billion, which is equivalent to only 20% in South Korea and 6% in Japan. In 2010, China exported 560,000 vehicles, equivalent to only 2% of the world's 26 million vehicles. It can even be said that the exports of all Chinese companies in 2010 are still lower than those of Toyota and Hyundai.

There is another data that cannot be ignored. In the first half of this year, China’s automobile export volume increased by 50.22% year-on-year, but the average export price continued to drop, at US$12,200 (approximately RMB78,700), slightly smaller than last year’s US$12,300 (approximately RMB79,300). decline. In 2009, this figure was 14,000 US dollars.

In an interview with Netease, Yang Aiguo, deputy secretary-general of the China Motors Products Import & Export Chamber of Commerce’s Automotive Subcommittee, said that China’s auto exports are still in their infancy. In fact, there are three major hidden concerns behind China's auto exports: 1. Single export model. General trade exports account for almost 60%-70% of China's auto exports.

2. The export market is highly concentrated. The "flock of bees" phenomenon in China's auto exports has caused most of China's auto exporters to concentrate on developing countries and markets such as Southeast Asia, the Middle East, and South Africa. This not only exacerbates the price competition among Chinese auto companies, but also has a relatively high risk.

Netease Motors found that in the first 7 months of this year, Jianghuai Automobile exported more than 27,000 vehicles to Brazil, and the single market accounted for 77% of its total exports.

3. The biggest advantage of Chinese auto exports is still price. The pain in Russia is a lesson from the past. It is understood that Russia was once the largest exporter of Chinese cars. In 2007, China exported nearly 57,000 cars to Russia. However, in 2009 this figure dropped to hundreds of vehicles. Chinese cars almost completely withdrew from the Russian market.

Russia’s continuous increase of tariff barriers has caused a fatal blow to Chinese auto exports. An export owner of an enterprise, who asked not to be named, stated that Russia’s robbery was ostensibly a tariff barrier, and that the fact that the low price of Chinese products was in direct conflict with the only car brand in Russia, Radha, was also one of the key reasons for this result. .

The source said that the price of Chinese automotive exports is usually only half the value of Japanese and American products. China's auto exports not only need to face “inclined prices” from within, but also products from developing countries such as India are increasingly joining the competition industry.

In addition, poor after-sales service is one of the more common problems overseas.

According to Yang Aiguo, at present, the major environment facing China's auto exports has not only failed to improve, but has worsened. Since last year, the Argentine government has continuously strengthened restrictions on imported cars and accessories. At the same time, the Brazilian government also announced in May this year that it added non-tariff barriers to restrict car imports. If the price advantage does not have more technical advantages or irreplaceability, it will easily embed the “detonator” that detonates the overseas trade barriers.

The good news is that the export strategy has been fully upgraded. All this is changing.

In the center of Moscow, there is a car dealership with a total area of ​​more than 8,000 square meters. It is not Volkswagen which is displayed on the inside, nor is it GM. It is the Great Wall Motor, a product of Chinese auto companies.

A netizen who has lived in Russia for many years told Netease that it is not cheap for Great Wall Motor to sell in Russia. Take Haval H5 as an example. The terminal price of the car is between 2.2 and 24,000 U.S. dollars. This price is almost equal to that of Tucson and Accord. The price of the Great Wall pickups is also comparable to Ford pickups and Toyota pickups.

In this regard, the Deputy General Manager of Great Wall Motor Shang Yugui said in an interview with Netease Automobile that there is a three-not-exclusive principle within Great Wall Motor: the purchase price is less than that of no account; no money is not produced; the price is too low Great Wall Motor Firm will not fight the price war and will never lose money to earn money.

After many years of accumulation, the product structure of Great Wall Motors' exports has shifted from the original pickup truck to the new pattern of today's pickup trucks, Haval SUVs and cars at 5:3:2.

As a Chery automobile with an export volume of almost one-third of the total sales volume, the company has taken the lead in the “soft export” of after-sales maintenance and made a commitment to “export of products and services first”. According to Jin Yibo, Assistant General Manager of Chery Automobile, at present, more than 90% of Chery’s overseas dealers are actively contacting Chery’s desire to implement products. Chery’s dealers require dealers to not only have physical storefronts, economic strength, and other requirements, but also commonly used accessories. Always keep a certain amount of inventory. In special circumstances, Chery Automobile has even taken the approach of transporting spare parts to the local area.

As a matter of fact, Chery Automobile is also changing the pattern of exports in the past, which has dominated the export model, and formed various forms such as general trade exports, CKD construction, and joint ventures. It has been revealed that Chery’s overseas CKD factories not only need to collect accessories fees, but also charge technology licenses, brands, etc. This year, Chery Motors has taken a key step in building overseas plants. The company's first overseas wholly-owned factory was officially started on July 19 in Jakarei, Sao Paulo, Brazil.

Jin Yibo said that the main market currently exported by Chery Automobile is exactly the 16 markets where Chery builds factories. This is a concrete embodiment of Chery’s strategy of moving from “going out” to “going in” this year.

It is not just Chery and the Great Wall that have really taken root in overseas markets. It is understood that Jianghuai Automobile plans to invest 600 million U.S. dollars in the construction of a plant in Brazil; Lifan Motors will also officially launch its Iraq plant in the Middle East; and Brilliance and the China-Africa Development Fund and the Egyptian Bavarian Group will formally sign a strategic cooperation agreement in Cairo, Egypt. The three parties will invest in the establishment of “Brilliance Egypt Automobile Manufacturing Co., Ltd.” and “Brilliance Egypt Automobile Sales Co., Ltd.” in Egypt’s Suez Economic and Trade Cooperation Zone to produce and sell the products of the Brilliance Automotive’s series of cars and vans; the Dongfeng Group is gradually realizing the marketing , that is, dispatching its own marketing team to directly face South Africa and other core markets, and even cooperate with South African partners to develop detailed models to meet local demand...

At the same time as the export model and product structure have been fully upgraded, the Chinese auto export market has begun to launch assaults from developed countries such as Southeast Asia, the Middle East, and North Africa to developed countries such as Europe and the United States.

The European and American markets started to fight

On August 17, Geely Automobile announced that the indirect wholly-owned subsidiary of the company, Shanghai Geely Meijiafeng International Trade Co., Ltd. (hereinafter referred to as Geely International), entered into an agreement with the specialty London taxi manufacturer, Manganese Copper Holdings Co., Ltd. Distribute automobiles and parts and provide after-sales service in the UK.

Geely Automobile's director of public relations, Yang Xueliang, revealed to Netease that the agreement was not the decision of Geely Group to make a head start. Manganese and copper company as the sales agent of Geely Automobile in the United Kingdom, the first cart type plan is the emgrand EC7, however, is still conducting some research and preparation work of feasibility, compliance and local adaptability, the final performance of the agreement It is also decided based on the results of the investigation and is expected to reach August and September next year. However, this is a willingness and attitude of the company, whether or not it is done.

State Council Premier Wen Jiabao MG6 went offline to inspect MG Motors UK Co., Ltd. in Birmingham, UK. Before Geely, Chinese cars had the first “crab” business, which was Shanghai Automotive. In July of this year, the first MG6 went offline in the UK. The relevant person in charge of Shanghai Automotive stated that the exteriors and interiors of these MG6s are made in China, and parts are shipped to Longbridge for assembly. Compared with the tariff of 10% of imported vehicles, the tax rate for assembly of SKD parts is only 4%.

In fact, the source stated that SAIC's autonomous strategy was focused on the global market layout from the very beginning. After so many years of hard work, SAIC spent hundreds of millions of huge sums of money, not only to build Roewe and MG brands in China, but also to let them occupy a place in the world. The return of MG6 to the United Kingdom is a crucial step.

It is understood that the price of the car in the UK is set between 16,000 - 2 million pounds. Since May, 39 dealerships across major cities in the UK have received orders worth up to 4 million pounds, which is the first time the brand has introduced new models in the country in 16 years.

In addition to the traditional car market, Chinese auto companies have also been irresistible in the new energy market. The City of Los Angeles Housing Authority (HACLA) and BYD Auto Co., Ltd. jointly launched the demonstration project of electric vehicle group customers. According to reports, the project contract has now been signed, BYD F3DM has also been put into use in the Los Angeles Housing Authority, BYD Auto began landing in the United States. Coincidentally. According to the US electric car manufacturer CODA Group, it has been revealed that it has entered into a letter of intent with China Great Wall Motor Corporation on the development of electric vehicles, and plans to promote Great Wall electric vehicles globally.

Entering the European and American markets has always been the long-cherished wish of Chinese auto companies. However, Chery is quite cautious about this. Jin Yibo said that in the short term, Chery did not intend to enter the European and American markets. Shang Yugui also stated that it will start with the broad European and American markets such as Italy and Australia. When conditions are not ripe, they will not rush into mature markets in Europe and America.

Shang Yugui gave a simple example. When the Great Wall Hover opened up the Italian market, staff outside the Great Wall and the local distributors visited dozens of times and conducted repeated discussions to overcome the production system, emission certification, and after-sales service. Only after a lot of problems did we achieve initial success.

"This can be said to be a rational return after the impulse," said Yang Aihua. It was recalled that Brilliance Automotive began exporting to Europe in 2006, but due to the company’s first model released in Europe, BS6 Zenchi achieved only one star performance in a safety crash test at the German German Automobile Association (ADAC). Had to go out.

In 2005, Chery also tried to enter the North American market, and signed a North American exclusive agent sales contract with Dream Car Company. It plans to sell Chery Automobile in the North American market from 2007. However, this cooperation finally broke up.

Yang Aiguo believes that Chinese auto companies are right about the cautiousness of European and American markets. At present, we can reach the European and American certification standards, but more importantly, how to achieve effective and stable sales. This is a systematic project. Avoid avoiding the mistakes of Hyundai Motor Co. of Korea.

In the 1980s, Hyundai Motor Co., Ltd. started to enter North America. With the ultra-low prices, Hyundai Motor was welcomed by North American consumers. However, due to quality problems, sales were almost stopped until the late 1990s. Return to the North American market. Toyota Motors also suffered from export setbacks due to a major setback in quality issues. In order to return to the US market, Toyota spent 5 years and Hyundai spent 13 years.