From being sold to the world to taking root around the world, China’s new energy vehicles are going overseas along the “Belt and Road”
Author|Wang Xin
Editor|Liu Jingfeng and Ding Juerui (Senior Editor of The Paper)
From October 17th to 18th, the third “Belt and Road” International Cooperation Summit Forum was held in Beijing.
In the ten years since the “Belt and Road” initiative, China has signed more than 200 cooperation documents on the joint construction of the “Belt and Road” with more than 150 countries and more than 30 international organizations on five continents; more than 3,000 cooperation projects have been formed, driving trillions of dollars in investment. scale, injecting strong impetus into the economic development along the route.
At the same time, Chinese private enterprises are also actively going global under the opportunity of the “Belt and Road Initiative”. From small household appliances and auto parts to electronic products, and to the currently hot AI robots, China’s manufacturing has undergone a transformation from “selling to the world to taking root in the world”. change.
On this occasion, “Xiaguangshe”, a special author of the Paike Finance column, launches the special topic “Going overseas along the “Belt and Road”: “From selling to the world to taking root in the world”” to jointly record the achievements of Chinese enterprises on the “Belt and Road” New look.
This is the second article in this series. We focus on the overseas journey of Chinese automobile companies and describe the strong “external expansion” of China’s automobile industry in the past ten years.
On July 3 this year, China’s 20 millionth new energy vehicle rolled off the production line of Guangzhou GAC Aian.
From the first to the 10 millionth vehicle, it took China 27 years; from the 10 millionth vehicle to the 20 millionth vehicle, it only took China 17 months. Also this month, China’s semi-annual automobile export volume surpassed Japan for the first time, ranking first in the world.
It is new energy vehicles that have made great contributions to China’s rise to become the world’s largest automobile exporter. According to data from the General Administration of Customs, China exported 2.34 million complete vehicles in the first half of this year, a year-on-year increase of 76.9%. Among them, 795,000 new energy vehicles were exported, a year-on-year increase of 112.7%. China’s new energy vehicles have an unprecedentedly strong momentum of going overseas.
Under the general trend of going overseas, China’s new energy vehicles have not only “went out”, but also quietly “taken root”.
In countries along the “Belt and Road” such as Thailand, Hungary, and Saudi Arabia, Chinese new energy vehicle companies and upstream supply chain companies are penetrating into the local market to build a new energy vehicle industry chain.
Power battery giantNingde eraFor example, in 2014, it embarked on the sea journey and successively set up subsidiaries in Germany, France, the United States and other places. In April 2022, its subsidiaries announced the construction of a power battery industry chain project in Indonesia; in August of that year, CATL announced the construction of a factory in Hungary, the first Central and Eastern European country to join the “Belt and Road” initiative.
In June this year, CATL issued another announcement, saying that it had reached a CTP (high-efficiency group technology) cooperation agreement with Thailand’s Arun Plus Co., Ltd. (Arun Plus) to help Thailand become a battery production center in Southeast Asia.
A month later, Honeycomb Energy also announced that the construction of the Thailand factory had officially started.
According to incomplete statistics, there are currently more than 10 lithium battery companies in China, including Guoxuan Hi-Tech, Yiwei Lithium Energy, Xinwangda, Ruipu Lanjun, Tianneng, Azure Lithium Core, GEM, Huayou Cobalt, and Zhongwei. Enterprises and raw material companies have already invested or are preparing to invest and cooperate in Southeast Asia.
A big trend is taking place: China’s new energy vehicles have shifted from being sold globally to taking root around the world. This change has also brought new opportunities and changes to overseas countries.
China’s automobile industry chain has taken root overseas, and there are traces of it ten years ago.
In 2012, China’s automobile export volume reached 1.056 million units, a record high. This is the first time that China’s automobile exports have exceeded one million units.
But since then, China’s automobile exports have begun to decline. By 2016, China’s automobile exports dropped to 708,000 units.
The reason for the decline in export volume is that at that time, China’s automobile exports were conducted through simple commodity trade, with parts produced domestically and then exported overseas for assembly through dealer channels. At that time, most of the overseas business of domestic automobile supply chains was carried out in the form of foreign trade agents. This also resulted in automobile companies being unable to gain insight into the needs and services of local consumers, and paying little attention to the applicability of products.
In today’s terms, these car companies do not yet have the awareness of “localization”.
Some keen car companies and suppliers have discovered that although foreign traders sell products to foreign customers at higher prices than domestic ones, after removing tariffs and logistics costs, their profit margins are not large, and they may even lose money. Moreover, the entire trade process involves customs clearance procedures, transportation, warehousing, security, etc., and there are also some unexpected risks hidden there.
Zhang Ming, head of the overseas factory of a domestic Tire2 supplier, told Xiaguang News that they expected that the agent model would compress profit margins, but after a period of time, they found that the brand promotion and after-sales service under the agent model were different from those in the local area. Compared with companies at after-sales service points, the effect is obviously reduced.
Zhang Ming discovered: “The information collection of agents is far inferior to that of branches. Originally, our Tire2 manufacturer was at the end of the supply chain, and the information we obtained was lagging behind. This agency model is like a wall, making it difficult to access.” Meet the real needs of customers.” For the manufacturing industry, a customer’s demand may allow them to obtain a new market increment.
In order to better respond to customer needs, they began to set up overseas branches in Malaysia, Japan and other countries. Since then, Chinese car companies and supply chain companies have begun a journey to take root overseas.
Although the history of Chinese car companies setting up factories overseas began in 2001, Chery had already begun to set up car manufacturing plants in countries such as Iran. Since then, China FAW and others have also explored setting up factories in markets such as Mexico. But this kind of “going overseas” is more of an attempt, and there are even many cases of failure midway.
The real big trend started in 2013.
In 2013, when the “Belt and Road” initiative was proposed, car companies saw overseas opportunities and accelerated their pace of overseas expansion.
Great Wall Motors Tula plant in Russia.Source: Great Wall official website
In 2015, Great Wall Motors’ Tula factory in Russia began construction. Different from the previous component assembly factory KD factory, this is the first overseas full-process factory of a Chinese car company. The Tula plant includes four major processes: stamping, welding, painting and final assembly, with a total investment of US$500 million, a production capacity of 150,000 vehicles, and a localization rate of 65%. It was officially completed and put into production on June 5, 2019.
In 2016, Geely began to set up factories in Belarus, which was the first to support the “Belt and Road” initiative. The factory is located in the Borisov region of Minsk Region, Belarus, with an investment of US$345 million. It includes three workshops for welding, painting and final assembly and various auxiliary facilities. At the end of 2017, the factory was put into operation. This is Geely’s first overseas factory construction project under its internationalization strategy, with the Eurasian Economic Union countries (currently Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan) as its main sales markets.
In addition, Southeast Asia and Africa have also become overseas destinations for Chinese car companies.
In August 2016, the BAIC South Africa plant, BAIC’s first overseas vehicle manufacturing plant, officially laid the foundation. This is the largest one-time investment by a Chinese enterprise in an automobile manufacturing plant in Africa; in 2017, Geely acquired the treasure of Southeast Asia’s first automobile manufacturer. Teng Motors; in February 2020, Great Wall Motors announced the acquisition of General Motors’ Rayong manufacturing plant in Thailand; during the same period, Chery has established 17 factories in Russia, Ukraine, Thailand, Indonesia, Malaysia, Argentina and other places, with an annual production capacity of That’s about 210,000 vehicles.
After several twists and turns, the above-mentioned Tire2 factory finally established its first overseas branch in Southeast Asia and established its own production line locally.
By building factories overseas, Chinese car companies have opened a new era of overseas expansion.
2023-10-19 05:44:00
#sold #globally #root #globally #Chinese #energy #vehicles #overseas #Belt #Road #OFweek #Energy #Vehicle #Network
