Chinese car manufacturers should explore overseas market in BRI countries

By Gui Junsong Source:Global Times Published: 2019/5/9 21:38:40

Illustration: Luo Xuan/GT

The automobile industry has become one of the fastest-growing industries in China since reform and opening-up, with annual auto production and sales each totaling around 28 million units, ranking first among countries for 10 consecutive years as of 2018. Chinese car brands have seen a remarkable rise, with their sales accounting for more than 40 percent of China's total car sales. Yet, Chinese car brands have so far failed to achieve a high degree of internationalization, with limited overseas investment and cooperation. Meanwhile, China's auto exports, including products of joint ventures, number just around one million per year. It can be said that Chinese car brands already have the strength and potential to "go global," which haven't been fully realized yet.

In the early years, when Chinese car brands, especially for passenger cars, were in the initial development stage, there was already a kind of "consensus" among Chinese car manufacturers. They believed that the European and American markets were high-end and mature, with stringent standards and sophisticated quality requirements, and thus entering these markets would represent extraordinary product quality, brand reputation and competitiveness. However, successive trials by Chinese car manufacturers to enter Western markets have seen repeated defeats, with no substantial progress recorded so far. By contrast, in some newly emerging markets, including those along the routes of the Belt and Road Initiative (BRI), Chinese car manufacturers have made some breakthroughs, with Chery Automobile, Geely Automobile, Great Wall Motors, Foton Motor and Yutong Bus being the pioneers of the industry. However, on the whole, Chinese car manufacturers' participation in the BRI is quite limited and is short of forward-looking and systematic planning, so their actual presence in BRI countries doesn't match China's status as a major automobile producer.

Aside from focusing too much on entering developed markets and facing setbacks, the super-large scale of the domestic auto market, which has been growing really fast, has always been the biggest market of strategic importance and top priority for Chinese car makers. In the meantime, the general consumption level is limited in countries and regions along the BRI routes, where markets are underdeveloped, and there are many objective obstacles in product standard regulations, testing and certification. All these factors have affected the global operations of Chinese car companies.

From the perspective of the market, the current domestic automobile market is on a downward trend as growth tends to stall while competition becomes unprecedentedly fierce. Market diversification and internationalization of companies have become inevitable choices. In this sense, it is increasingly essential for Chinese car manufacturers to explore overseas markets. More importantly, results of the early exploration by Chinese car makers under the BRI show that Chinese car brands can meet local market demand in countries and regions along the BRI routes. The massive rise of Chinese car brands is a major event in the world's auto industry in the 21st century, which has changed the global auto industry landscape. Such achievements can certainly be shared with the world, playing an important role in connectivity construction under the BRI. As for some obstacles, I believe that with further implementation of the BRI, most of these problems will be properly solved.

As an open platform, the BRI essentially doesn't belong to any specific industry. Various industries could develop in full swing within the BRI framework as long as they conform to the principle of achieving shared growth through discussion and collaboration. Objectively speaking, during the six years since the BRI was proposed, energy, transportation industries and other infrastructure have seen remarkable progress. But if we just assume that the BRI is only a stage for the construction of energy and other infrastructure, that's an incomplete understanding. The construction of the BRI is a system that all industries, including automobiles, should make use of to make a difference. In particular, automobiles are a broad category that covers not only passenger cars but also buses and trucks, which are used in production. They are an important part of transportation and logistics systems. 

I believe that once road infrastructure has been improved in countries along the BRI route, and after the basic connectivity framework is formed, cars, as an important transportation tool, will gain more acceptance by the public. Just like air transport and railways are considered large arteries, road transport and vehicles are the capillaries of the logistics transport system. At that time, the importance of the auto industry in BRI construction will become increasingly prominent.

The author is editor-in-chief of the China Automotive News.


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