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In the last two years, Chinese auto brands’ development has caught a lot of eyes, but their oversea business just started. The “Belt and Road” initiative provides a great opportunity to pursue global economic prosperity. Today, projects related to this initiative have already achieved primary success and the future looks bright. The question confronted by the China auto industry today is: how can Chinese auto brands take advantage of this opportunity to become a great global automotive player?

So, how will the “Belt and Road” initiative provide opportunities for the Chinese auto industry? How do Chinese auto companies focus on the overseas development? How far is still ahead for Chinese brands to grow into global brands?

During the 2017 Global Automotive Forum held on June 7th, former Secretary of Commerce for Foreign Investment and Economic Cooperation and Commercial Counsellor Chen Lin, Professor of Tsinghua University School of Law Cheng Yu-Tung, former Vice Chairman President and Chief Investment Officer of The China Investment Corporation Gao Xiqing, Chery Automobile International Executive Vice President Du Weiqiang , and Yingli Group Executive Vice PresidentYang Bo joined the brainstorming session together.

 

A Historical opportunity to show power

Chen Lin pointed out that the “Belt and Road” initiative has a very important significance for the development of western China during China's economic circle, and promotes deep reform and leads the peaceful development of the Chinese strategy. Overall, the “Belt and Road” initiative provides a unprecedented historical opportunity for the automotive industry to go global .

2016, the Chinese brand car exports totaled 700,000, compared to 14 million of the year the Chinese brand production and sales, the export scale is not large, but the future of China's brand car exports will be very bright by taking advantage of the “Belt and Road” initiative

When it comes to car exports, in recent years, Chery has deeply plowed their "global value chain", so its international capacity has been significantly improved. In 2016, the number of Chery automobile export volume reaches a total of 88,081 units; this year in April, Chery continued its rapid momentum as in last year, totally exporting 34190 new cars, an increase of 25.5%. And only in April, car exports amounted to 10030, an increase of 58.2%, growth of 11.1%, far exceeding the average market growth and gaining the No. 1 of domestic auto export sales for 14 consecutive years.

Since the “The Belt and Road” strategy was brought out, the number of Chinese brands cars exported to the countries along the “BR” area has been increased. Du Weiqiang said that Chery has exported nearly 65% cars of its total number to countries along the line of the Belt and Road , making these countries the main battlefield of the Chinese brand car exports .

 

Noticeable Export Problems

Although the export number of Chinese brand cars is increasing, according to Du Weiqiang, the globalization of Chinese brand car has reflected four features. First, export countries are generally in economic downturn, industry shrinking, and exchange rate depreciation. Second, the main destination of exports is still Asia, Africa and Latin America. Third, we are still "small and NOT strong". Forth, our overseas risk resistance capacity is still low.

Yang Bo also said that now, as a branch of automobile exports - Chinese brand motorcycle encounters some problems in the overseas market: homogenization and other quality and service problems; lack of aftermarket service, lack of brand; wide market but low profit, less elaboration, simply trading rather than smartly marketing.

 

“Respect, Win-Win "to Go Far

Facing the opportunity brought by the Belt and Road, Gao Xiqing called on that Chinese car enterprises should respect the local market, do not blindly using the money to knock on the door. “As for overseas market rules, on the one hand we are not familiar with, more importantly, we do not respect. Every country has its own approach, political system, cultural beliefs, so we must have enough attention” Gao Xiqing pointed out that Chinese car companies like to use money to solve problems, "It is not sustainable to heavily rely on using money to knock the door. If people got the money in hand, then they will let you go.

Owing to the lack of understanding of overseas market, law and society, Gao Xiqing thought Chinese car companies continue to pay tuition for learning in overseas market", Chinese cars need to study overseas law if they really want to go abroad.

Du Weiqiang pointed out that the Chinese brand car should possess strategy before taking action. As to thought, we should be well-prepared for the international market situation and risk and should seize chances in the international market. As to tactics, reinforce the foundation, provide good products, and offer satisfied brand and service internally; strengthen research in overseas and make full use of market access, product launch, target population, channel construction, and indigenous manufacturing externally. As to action, understand the spirit of consultation, joint development and sharing advocated by “The Belt and Road”. As to consultation, it is necessary to strengthen the communication between “the Belt and Road” and the counties related to this policy, and fully understand the lessens, trends, policies and needs of local car development. Enterprises need to voluntarily integrate their own development into the local automotive industry development, to take an active part in the discussion of the car development with target counties, and build a good business environment for the Chinese car in the local place.

As for the experience of motorcycle exports, Yang Bo also gave some advice: without practice and diligence, there will be no improvement or fortune; Chinese companies should learn from Volkswagen’s strategy in China. Form business alliance as early as possible and share legal and public resources with others in oversea market. We should be self-discipline and formulate agreements and regulations, coordinate properly to avoid vicious competition. Just like intensive farming is the crucial way for durable mechanical products, car marketing follows the same logic. We should forget the traditional trading theories and prepare advancing technologies and talents as early as possible.

In general, only through elaborated quality and services, can Chinese brands win in the international market and make a success abroad. “If Chinese cars want to go out, we have to change from our mindset, our perspectives and our work methods. Only in this way can we truly achieve globalization.” said Du Weiqiang.

Documentary of GAF2016