Local brands expand overseas production

2023/10/23 Share To weixin sina

Visitors inspect a BAIC vehicle at the 2023 Festival of Motoring Johannesburg in South Africa on Aug 27. [ZHANG YUDONG/XINHUA]

Countries involved in Belt and Road Initiative provide strong base for global expansion

China's Changan signed a deal last week with the Thai authorities to build a vehicle-producing plant in the Southeast Asian country, as the State-owned carmaker revs up efforts to explore overseas markets, especially those involved in the Belt and Road Initiative.

The Chongqing-based carmaker said it will invest 8.8 billion baht (around $240 million) in the production facility, initially designed to produce 100,000 new energy vehicles a year.

The NEVs to be produced in its Thai plant will be sold in the country and exported to other markets such as Australia, New Zealand and South Africa.

Changan is joining the ranks of other major Chinese carmakers including SAIC, Great Wall Motor as well as BYD, which have unveiled plant plans or are already producing vehicles in Southeast Asia.

Their local production can complement the local automotive industry and will allow those Chinese carmakers to become more competitive in the market, said Yahaya Ahmad, technical leader of the ASEAN New Car Assessment Program.

Ahmad said the popularity of Chinese branded vehicles is growing thanks to their improved quality.

"I would expect Chinese carmakers to be competitive … they can compete in terms of the safety, in terms of the cost, in terms of the quality," he said.

As Chinese carmakers speed up to explore overseas markets, countries involved in the Belt and Road Initiative have emerged as major destinations.

Changan said it has built over 400 dealerships in those countries including Saudi Arabia and Chile.

Last year, over 90 percent of its exports were in Belt and Road countries, with their combined sales revenue reaching 12 billion yuan ($1.64 billion).

JAC Group, headquartered in Anhui province, is present in 124 BRI countries, with its cumulative exports reaching over 800,000 units.

It has 19 knock-down plants overseas, with 16 of them in countries involved in the Belt and Road Initiative.

It is also the first Chinese company to work with local car producers in Kazakhstan. JAC established a partnership with Allur Group in 2013.

Since then, the group's vehicle output has increased annually, with vehicles produced exceeding 70,000 units in 2022.

JAC said it will continue to strengthen the partnership and launch more new products to offer a greener mobility experience to Kazakh people while promoting bilateral economic growth.

BAIC Group is targeting the BRI countries as well. Its subsidiary BAIC Foton is selling vehicles in around 130 countries and regions, with most of them are BRI countries.

In Chile, there are around 1,400 Foton electric buses placing it as the best-selling brand in the segment. Santiago, the capital of Chile, is the city with the largest number of electric buses in South America.

BAIC has invested $226 million in its plant in Johannesburg, South Africa, which is expected to produce vehicles for the continent of Africa and also overseas destinations including Europe and the Middle East.

In the Philippines, Foton's plant offers over 700 jobs for local people, and the brand has a service and sales team of over 5,000 people, with most of them being locals.

Foton said it is speeding up construction of its plant in Argentina, which could produce over 5,000 vehicles a year when completed.

The brand already has over 20 knock-down plants outside China, offering jobs for 10,000 people.

China's leading bus maker Yutong said 80 percent of its overseas markets are BRI countries, with cumulative deliveries reaching 72,000 units.

Earlier this year, Yutong delivered 800 buses to Uzbekistan, which are used to improve local transport.

The order, comprising 300 electric and 500 compressed natural gas vehicles, marked the largest of its kind from Chinese bus makers.

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