Chinese automakers embark upon global push to increase export markets

Citing significant improvements in vehicle safety technology and positive results in reaching related international testing standards – along with directing additional attention toward branding and marketing techniques – China’s domestic automakers are intent on expanding their pace of overseas exports.

“We’re now using the most advanced test lane in the world to examine our product quality, because our target market is not only in China, but also in Europe and even the U.S.,” says Wu Guoda, deputy general manager of Zhejiang Geely Holding Group, the nation’s largest non-government-owned auto manufacturer; it purchased the Volvo Car Corp. from Ford in 2010.

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“Last year China exported about 1 million vehicles abroad, mainly to developing countries,” says analyst Jia Xinguang at Automobile Magazine. “In fact, we now have very advanced manufacturing technology, but still lack so much in branding. Chinese cars must find ways to boost their creativity and originality,” he points out. “You can’t export your cars to a foreign market if you copied their design in the first place.”

“I just got out of one of Geely’s latest designs,” reports journalist Ai Yang. “The car is made in China, its technology is Chinese. But most importantly, the car has scored a four- out of five-star rating in Europe’s new car assessment program, and that’s a milestone in Chinese car-making history.”

Ai goes on to note that “the crash test results have put Chinese brands on the map with international brands when it comes to safety technology. And that credit has also paved the road for more made-in-China cars to enter the overseas market.”

In December, Geely set a new monthly export record by shipping 11,000 cars, boosting its overall 2012 export sales by 164 percent.

During the first 11 months of 2012, China exported 470,000 passenger vehicles – with the domestic automakers averaging a 30-percent rise increase over 2011’s figures, according to the China Association of Automobile Manufacturers (CAAM). From January to December, Geely’s exports totaled 100,300 vehicles.

The company’s strong overseas sales are “due to Geely’s new range of highly competitive vehicles and increased investment in key areas such as quality and branding,” says Vice President and General Manager Dr. Zhang Lin. “Geely has now entered into a strategic period for export sales,” he adds. “Going further in 2013, we will add more models to our export lineup, such as the GX7 SUV, which will help us continue with our sales success.”

Current major overseas markets include the Ukraine, Russia, Iraq and Saudi Arabia. “In 2013, Geely will aggressively expand into Egypt, Iran and Algeria to gain a foothold in each key geographic area, which will help the company expand outwards from each region,” Zhang says.

“New models will be continually introduced into export markets; the new GX7 will be rolled out to key international markets over the course of 2013, and other new models will follow,” he continues. “Geely plans to aggressively expand in each market with increased investment, new models and strengthened training policies for its domestic and international sales staff to ensure customer satisfaction in all markets.”

Geely has set up multiple “complete knock down” (CKD) assembly facilities in several key markets to speed up vehicle deliveries while lowering the sticker price. CKD plants have been constructed with local partnerships in Russia, the Ukraine and Indonesia. A new CKD factory opened in Egypt in mid-2012, and plans for new production facilities in Ethiopia and Brazil are moving forward.

Hot sales in Chile
China’s Jianghuai Automobile Co., Ltd. (JAC) exported nearly 55,000 vehicles last year, with close to 30,000 units destined for the South American market – amounting to 60 percent of JAC’s total exports.

Released to the Brazilian market in late November, 400 J2s were sold within 20 days. A J2 advertising video posted on YouTube garnered 510,000 clicks in 24 hours.

“JAC has made important steps in South American localization in 2012 in order to provide better and more localized products to reward customers, and to make contributions to the local economy,” says An.

An assembly plant to produce light trucks has been established in Venezuela, and construction is in progress on a Brazilian factory with completion slated for 2014. Representing an investment of $600 million, it is expected to produce 100,000 vehicles per year.

“It will certainly create more job chances in Brazil and drive local economic development and progress of the society,” says Li Jinzhang, China’s ambassador to Brazil.

JAC markets its vehicles to more than 30 South American nations.

“Because of its rich products, durable quality and intimate service of its passenger vehicles segment, JAC has become the best-selling Chinese brand in Brazil, Bolivia, Columbia and Costa Rica,” according to An. “JAC has risen to be among the top three best-selling Chinese brands in Chile and Peru. While in the commercial vehicles segment, JAC leads Chinese commercial vehicle brands in the South America region and has become one of the top two global commercial vehicle brands in Peru, Chile, Columbia and Ecuador; 2012 was a year of great leaps for JAC in South America,” he reports.

“JAC regards South America as a second hometown,” says An. “JAC promises its hometown people that it will bring first-class products, quality and service, as well as a mature auto manufacturing experience to South American markets, and to make further contributions to the growth of local economies and the automotive industry. In 2013, JAC hopes to realize better growth, and that JAC products will be embraced by more and more South American people.”

A practical focus
JAC first entered the African marketplace while delivering a shipment of light trucks to Algeria in 2001. Since then, the company has sold some 50,000 vehicles throughout the continent. In 2012, about 13,000 units have been brought into the African market, up 82 percent from 2011’s figures. Accounting for 25 percent of JAC’s exports, Africa is a key part of the company’s “push toward globalization.”

JAC is already selling to more than 30 African countries and regions, including Egypt, Morocco, South Africa and Ghana. Its product portfolio in Africa over the past 11 years has been expanded to include light-, medium- and heavy-duty trucks along with passenger cars.

“Because of its practical focus on responsible attitude and high-quality products, JAC is becoming an increasingly recognized brand in Africa among individuals and commercial clients alike,” says An. “For instance, Coca Cola’s Algerian branch selected JAC’s light truck several years ago because the company’s local management was impressed by its high-performance turbocharged engine. Because of the trucks’ performance, drivability and quality, as well as the company’s after-sales services, Coca Cola has become a loyal client of JAC in Algeria. JAC is also the second-largest commercial vehicle brand in Egypt, with more than 3,000 vehicles on the roads.”

Three African assembly plants are located in Ethiopia, Morocco and Egypt; JAC plans additional factories in South Africa and Kenya.

“In order to better meet the demands of African customers, JAC has carefully studied the concrete road conditions and users’ habits, and continuously improved the vehicles’ adaptation,” says An. “For instance, vehicles used for long-distance transportation are equipped with larger fuel tanks; in the plateau areas of Kenya, larger-displacement engines and larger-capacity cooling fans are standard, and so on.”

He observes that “during the past 11years, JAC has achieved great progress in Africa with the support of local customers. We will continue our efforts to improve product quality and services to better serve the African people. We eagerly seek cooperation with more partners there, and we hope to make further contributions to the growth of local economy and the automotive industry.”

In December, JAC started construction on a third service center in Riyadh, Saudi Arabia, that will be the largest such facility in the Middle East: “With the growth of JAC sales volume and marketing shares in Arabia, the new service center is demanded urgently to enhance JAC service ability.”

For more information, visit www.geely.com and www.jac.com.cn.

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