China's auto export ratio is the lowest in the world

On August 29, Chery Automobile’s Venezuela plant was officially put into operation, becoming the only Chinese auto company that has obtained permission to install passenger vehicles in Venezuela, and Chery A1 and A3 have been put into operation locally.

On August 25, Great Wall Motor launched the new Tianjin base with “The Great Wall of the World, the Global Haval” and invited many international distributors to stage the “Human Wall Show”. The Tianjin base, which is near the sea, will become the CKD/KD production of the Great Wall and the export logistics production base.

Two days before, Geely Automobile acquired the Volvo Car for a year and debuted a new brand strategy of “human-oriented” in Beijing. The famous luxury car company constantly emphasized that it is the first global luxury car brand owned by China. , "To locate the brand, even the Ming Dynasty furniture have been studied."

It must be said that history has an amazing miniature. The above three segments can reflect the evolution of the internationalization strategy of Chinese auto companies in the past 10 years since the accession to the WTO, from the “guerrilla warfare” to the establishment of an international base to implement the “position war”, to the construction of an international marketing network, and to the execution of international car companies. Acquisition. This 10-year trajectory has more stories.

Track: 10 Years of Exports in Automobile Exports According to the latest report from the China Association of Automobile Manufacturers, in the first seven months of this year, China’s auto exports reached 454,400 vehicles, an increase of 57.3% over the same period of the previous year. According to this level of calculation, this year's auto exports will reach around 900,000 vehicles. In 2002, after the accession to the WTO, the total vehicle export volume was only 20,000 vehicles. Therefore, the export volume of automobiles will increase by at least 40 times in ten years.

The relevant data shows that since China's accession to the WTO at the end of 2001, China's auto exports have experienced three stages of development.

During the first phase from 2002 to 2007, automobile exports continued to grow at a rapid rate, and vehicle exports basically increased at a rate that doubled in a year. Since 2002, the total number of exported automobile vehicles has rapidly increased from 20,000, 48,000, 78,000, and 172,000 to 343,000, and in 2007 it reached 613,000. In 2003, 600 of China’s first right-steering sedan POLO sedan produced by Shanghai Volkswagen was exported to Australia, which was the first batch of exported cars produced in China by developed countries.

By 2008, affected by the financial crisis, from the fourth quarter of 2008 until 2009, China’s auto exports have experienced a rapid decline, and vehicle exports have experienced negative growth for 15 consecutive months. In 2008, China exported a total of 644,000 automobiles, valued at US$8.88 billion, an increase of 9.4% and 32.5% respectively over the previous year, and the growth rate dropped by 76.2 points and 100% respectively. In 2009, there were only 370,000 exported vehicles and various types of chassis, which was equivalent to the 2006 level.

During this period, the relevant ministries and commissions of the country launched the "Automobile Export Strategy", which for the first time clearly stated that "by 2015, automobile and parts exports will reach 85 billion U.S. dollars, with an average annual growth rate of 20%; by 2020, China's auto and auto parts exports will be realized. The strategic goal of 10% of the world's total trade in automotive products, and explicitly proposed to accelerate the construction of national auto and component export bases.

The situation was not reversed until 2010. In the past two years, with the gradual recovery of demand in the international market, China’s auto exports have seen rapid recovery. In 2010, a total of 566,200 vehicles were exported, an increase of 53.17% year-on-year; among them, 180,000 cars were exported, and the export of cars has already accounted for nearly one-third of China’s total vehicle exports. Independent brands dominate the export of automobiles in China.

Transformation: From "guerrilla warfare" to "position warfare"

In the past 10 years, another change in auto exports has been from “guerrilla warfare” to “position warfare.” Especially after the international financial crisis, overseas plant construction has become a new strategy for car companies.

In March 2006, Great Wall Motor’s KD assembly plant built in Russia became the first Chinese company to carry out assembly operations overseas. In recent years, Great Wall Motor has established KD assembly plants with local partners in Russia, Iran, Egypt, Senegal, Philippines, Ethiopia, Sri Lanka, Sudan and other countries. At present, overseas KD assembly plants have reached 12. Great Wall Motor expects that by 2015, there will be 24 overseas KD assembly plants with a designed annual production capacity of 500,000 vehicles.

Chery Motors, the largest exporter, has also rapidly promoted the establishment of overseas plants. In July this year, Chery’s wholly-owned Brazil plant was started and the total investment reached 400 million U.S. dollars, becoming another major expansion of Chery's overseas expansion. Chery began to export its vehicles through the country for the first time in 2001. At present, it has built 16 production bases in 15 countries and regions including Russia and Egypt, and has more than 1,000 sales and service outlets in more than 80 countries and regions in the world. The export volume has surpassed 500,000 vehicles, and Chery has achieved a transition from “going out” to “going in”.

In the process of becoming a global market, Chery has established a complete set of internationalized strategic ideas. Through a variety of cooperation methods with international capital and technology, it has continued to promote the localization process of overseas markets and has achieved continuous development, production and sales. Through the full value chain of after-sales services, we have achieved our goal of becoming a global market.

However, the authoritative research report pointed out that due to the small export volume, most auto companies currently do not have their own leading marketing network, but rely on overseas agents, and there is no perfect sales and after-sales service system overseas. The entry mode of trade is still the main mode of the internationalization of China's auto companies. In the export of China's auto products, general trade still occupies a dominant position, and only a few auto companies such as Chery, Great Wall, Dongfeng adopt the contract and investment model.

The crux of the problem: There is no strong brand. A research report believes that the main characteristics of China's auto exports during the 10 years after China's accession to the WTO are: exports of auto parts are greater than the total exports of auto vehicles, and the largest contribution to exports; auto brand vehicles account for the dominant position of auto exports. The export of brand cars is rare; the export of cars has already accounted for nearly one-third of the total export volume of China's vehicles, and the export products have also improved; the vehicle export market is concentrated in Southeast Asia, Africa and the Middle East, and automobile exports have not yet formed a strong brand.

Another feature that has not been summarized is that in the context of China becoming the world’s largest auto market, the ratio of auto exports to auto production ranks the last in the world.

“There is no company in the world that sells more than 3 million vehicles like us, but the export volume is so small.” SAIC Chairman Hu Maoyuan once said so, this is actually the common aspiration of the domestic car companies. SAIC confirmed that “in 2015, our production and sales target is 6 million. Among them, 800,000 are produced overseas and 5.2 million are produced domestically.”

This is obviously a very challenging goal.

Statistics show that in 2010 China's total automobile production reached 18,260,000 units, ranking first in the world, of which exports were about 540,000. China's auto exports account for only 2.98% of total production. This proportion is at the lowest level in the world's major auto-producing countries, even less than India, Brazil and other BRICS countries.

In contrast, Germany exported approximately 4.24 million vehicles in 2010, accounting for 76.29% of production. Japan exported nearly 5 million vehicles in 2010. South Korea exported 2.77 million vehicles throughout the year. The total number of Thai cars exported in 2010 is about 900,000 vehicles, and it is expected to exceed one million in 2011.

India, which is a member of the BRIC countries, has continued to increase its export volume in recent years and has not experienced a decline even during the financial crisis. By fiscal year 2009-10 (April 2009 to March 2010), the country's exports have reached 1.8 million, an increase of 17.90% year-on-year. Officials from the Ministry of Heavy Industry had predicted that India's automobile exports will increase by another 10%-15% in fiscal year 2010-11. The proportion of Indian automobile exports in its total output has gradually increased from 6.63% in fiscal year 2003-04 to 12.84% in 2009-10.

Although Brazil's auto exports are not as much as India, its share of production is higher than that of India and higher than that of China. From 2008 to 2010, Brazilian auto exports were 730,000, 460,000 and 770,000, respectively, which accounted for 23%, 15%, and 21% of production respectively.

Of the BRIC countries, only Russian exports of cars are lower than China. From 2007-2009, the country’s auto exports continued to decline, reaching approximately 180,000, 160,000 and 50,000 vehicles respectively, and its share of the country’s total production also fell from approximately 11% to 9%, and It further fell to 7.5% in 2009, but it is still higher than the proportion of China's export volume in the same period.

China’s largest exporter is Chery Automobile, which accounted for 92,000 vehicles in 2010, and only accounted for 13.5% of its annual sales of 682,000 vehicles.

Not only that, China's auto exports are still at an early stage. The entire vehicle export market is concentrated in Southeast Asia, Africa and the Middle East. In 2010, where the main export models were relatively low-end, the average export vehicle price was only US$12,300, while the average price of imported vehicles during the same period was US$37,700. In addition, since the accession to the WTO, Chinese auto exports have not formed their own strong brands.

Trends: In the ten years between the joint venture export and overseas acquisitions and the entry into the WTO, the international strategy of Chinese car companies not only exported their own brands, but also achieved the export of international brand cars produced in China. The future joint venture products are expected to increase exports. , thereby expanding the volume of exports. In addition, after the financial crisis, domestic auto companies also successfully implemented a number of overseas mergers and acquisitions, and even became the savior of the international declining car aristocracy.

On October 21 last year, as the first batch of Chevrolet New Sail shipped from Yantai port and went to South America and North Africa, the international brand of JIAJIA, which was developed in China, went abroad for the first time to participate in international market competition. From the export of an internationally-branded car made in China to the export of an internationally branded car developed entirely by the locals, a leap in the history of domestic car exports was completed.

The new Sino-European exports not only completed the transformation of Shanghai GM's export business, but also made it more mature as a global export base for SAIC Motors and SAIC Motors. In the form of exporting international branded products, it also contributes to the export of Chinese cars and Chinese R&D projects. . Therefore, it is another breakthrough in Chinese auto exports.

In terms of the export of Chinese-made international brands, Honda Motor’s base in Guangzhou has already exported JAZZ to developed countries since 2005. The existence of similar export bases shows that the level of Chinese manufacturing can fully meet the requirements of the international market. After the financial crisis, China became the new center of the global automotive industry. The international giants injected a lot of resources. In addition to accelerating the development of the domestic market, including Peugeot Citroen, Ford and General Motors, all have plans to make China an export base.

The more important breakthrough came from SAIC-GM-Wuling. After GM and SAIC Group jointly established an Indian company, SAIC-GM-Wuling, which both companies took shares, became the front-runner in implementing India's strategy. In contrast to the previous export model, SAIC-GM-Wuling mainly exports technology, products, talents, and management models to Indian companies. It is able to charge Indian companies for technology transfer fees, as well as managers’ export expenses. This is for domestic automobile joint venture companies. It is a brand new breakthrough.

In terms of international mergers and acquisitions, the cases that took place in the past 10 years mainly included SAIC's acquisition of the controlling South Korean Ssangyong Motors, Geely's acquisition of Volvo Car Corporation, and Jingxi Heavy Industry's acquisition of Delphi's business. The Chinese auto companies' international mergers and acquisitions were promoted after the financial crisis. In 2009, Jingxi Heavy Industry successfully acquired the damping and braking business of Delphi of the United States. The final purchase price was close to 90 million US dollars, the largest one of overseas Chinese auto parts overseas acquisitions. . Geely's purchase of Volvo Car Corporation for US$1.8 billion was the most sensational, and this is the first time that China has a global luxury car brand.