Overcapacity seeks to release overseas Chinese car companies into internationalization

With the constant saturation of the Chinese auto market share, the competition among brands has become increasingly fierce, and all brands have intensified their efforts to expand overseas markets. It is worth noting that apart from the independent brands that have flourished in overseas markets in recent years, there are also many joint venture car companies. Behind this is showing that in the global strategy of foreign car companies, China is shifting from a simple sales market to an international production base. Analysts pointed out that after experiencing a new wave of production expansion, the “idle production capacity” of joint ventures has long been included in the global production plan for multinational car brands.

The transitional production base won the exporter's machine In June 2012, Zhao Hongwei, the head of the Zhengzhou Nissan Overseas Division, and his party embarked on a road trip to the three countries in the Middle East. This is also the prelude to Zhengzhou Nissan's further expansion into the Middle East. It is understood that from 2012 to 2016, the planned export volume of Zhengzhou Nissan will increase from 8,000 units to 28,000 units, achieving an average annual growth rate of 37%. At the same time, overseas exports will account for 15% of the company's total sales in 2016.

In fact, the overseas business of Zhengzhou Nissan started relatively late and was once limited to export because of the joint venture. With the formation of Zhengzhou Nissan’s dual-brand features and the expansion of the Dongfeng brand product line, Nissan gradually relaxed its export restrictions and agreed to open up its overseas sales network, which is still the first case among joint venture auto companies. Zhengzhou Nissan insider told Nandu reporter that Nissan’s relaxation of its export shows that Zhengzhou Nissan has gradually become Nissan’s global LCV production base, and Nissan’s attitude towards the Chinese market has also changed from the previous sales market to the global market. The transition of the production base. In 2008, Zhengzhou Nissan established the Overseas Division. After four years of development, Zhengzhou Nissan's overseas business division has established distribution and after-sales service networks in more than 20 countries (regions) around the world, and even overseas factories, mainly through the form of vehicle exports, sales including pickup, SU V, M PV Dongfeng brand products including the CDV and other models, and the Capstone model of the Nissan brand. In 2011, Zhengzhou Nissan’s total vehicle exports increased by 70%, exceeding the average of 49% of China’s total vehicle exports.

In fact, China, which has become the world’s largest auto market, is gradually becoming an export base for more and more brands in addition to the competing sales markets. Previously, BMW Brilliance and Beijing Benz announced the export of five-line long-wheelbase models and long-wheelbase E-class sedans, and earlier, many joint ventures including PSA, Toyota, Honda, Shanghai Volkswagen and Shanghai GM. All have also realized the desire to export cars from China to overseas. “In recent years, in addition to the outstanding performance of independent brands in overseas markets, the export of domestic joint venture brands has also been greatly developed.” Cui Dongshu, deputy secretary-general of the National Passenger Vehicle Market Information Association, told Nandu reporters that Shanghai GM and other companies are exporting. It also achieved good results. For example, one-third of the sales of 30,000 of Sailou are sold overseas.

The authoritative report on the major target markets in the Middle East and other regions pointed out that in 2011 China's auto spare capacity has reached 6 million, which is equivalent to twice the size of the German auto market. It is estimated that by 2016, idle capacity will increase to 9 million. As a result, the market's growing concern over overcapacity is accelerating as the growth of the auto market slows down. However, this seemingly headache can be found in overseas markets.

Fang Nade, senior vice president of BMW Brilliance, said that if there is a change in demand in the Chinese domestic market in the future, at least through the export channel, products can be sold to other markets in the world.

Cui Dongshu told Nandu that the current domestic joint-venture car companies have made considerable progress in terms of cost, quality and spare parts supply, especially in the A 0 and A 00 models, and have obvious cost advantages in the international market. This is a domestic joint venture vehicle. Enterprises have laid the foundation for joining global production. At the same time, multinational car companies have received the impact of exchange rates and production costs, and the search for a global production capacity has become increasingly urgent. Therefore, they are actively operating to establish a production base in China. He said that whether it is the Middle East, Eastern Europe or Southeast Asia, for those companies that have multinational car brands sales network, but does not have a factory of countries and regions, are the target markets for the release of joint venture vehicle manufacturers. Moreover, with the increase in the experience of joint-venture vehicle companies exporting overseas markets and the deceleration of the growth rate in the domestic market, the proportion of joint-venture vehicle manufacturers exporting models to overseas markets will increase.

It is worth noting that just as Zhengzhou Nissan relied on Nissan’s sales network in overseas markets, joint-venture car makers did not have enough voice in overseas channels, and more often played the role of “processing plants” in their products. What is obtained from the export is only the processing profit. In this regard, Cui Dongshu said that joint venture car makers should strengthen localized R&D and localized procurement so as to gain a more proactive position in terms of products and costs.