Geely's "Double Engine" drives soaring export

Source:Globaltimes.cn Published: 2013-10-24 11:41:14

As China's automobile export was rather depressed since May, Geely Emgrand outperformed other car brands with its export year-on-year growth of 74 percent from January to September, thus becoming a symbol among China's self-owned automobile brands for export.  The transformation of Geely's quality-oriented strategy has gained fast progress by expanding oversea markets, controlling internal quality and smoothing export procedures.

In September, China's commodity exports decreased by 0.3 percent with negative growth again, which further builds up pressure on foreign trade recovery.

Automobile's contribution to China's commodity exports was also disappointing. In September, China's automobile enterprises exported 78,100 units, 28.9 percent lower than the same period of last year, and declined for a fifth consecutive month.

However, Geely bucked the trend with its export year-on-year growth of 17 percent from January to September, especially Emgrand with year-on-year growth of 74 percent serving as a symbol of China's self-owned automobile brands.

Let us explore the secret of Geely's "double engine" driving force on its export growth.

Internal engine: quality-oriented strategy

Geely, an enterprise fears no competition, has taken 6 years to carry on enterprise transformation from "manufacturing affordable cars for common people" to "manufacturing the safest, greenest and most energy-efficient cars", which lifted the quality of Geely's automobile to a new level.

In Geely, world-leading equipments can be seen everywhere; for instance, Korea's automatic steel plate offline cleaning and oiling device, Japan's three-dimensional five-axis laser cutting machine, world's leading Auto Guided Vehicle (AGV), Yaskawa PX2900 anti-explosion robot, Illinois Tool Works (ITW)'s ransburg rotary bell atomizer, ABB robot, and Durr's latest generation of detection devices.

However, the internal cause for Geely's soaring exports is attributed to its strict quality control system.

At the end of 2011, An Conghui, former Vice President of Zhejiang Geely Holding Group and General Manager of Zhejiang Geely Automobile, took office as president of the Group and put forward the business development concept of "benchmarking management and quality management" for the first time. In 2012, the Group determined to carry out President An's  development concept by working on each support system and core value chain of R&D, purchasing, manufacturing and marketing in full blast.

In Geely Ningbo Branch, GGQ353 project which promoted the quality-oriented strategy covered each business module such as R&D, manufacturing, technology, quality, purchasing and management, and clarified the promoter, executor, goal and measures for each module. The Staff Autonomic Quality Assurance System of Problem culture, White handkerchief project and "Ensure quality by myself" has taken firm root among the staff.

Geely Emgrand also enhanced its image in oversea market by implementing benchmarking management. After gaining a five-star rating with 46.8 scores in C-NCAP at home, Emgrand EC7 got a four star rating in E-NCAP in Europe, setting the best score among China's self-owned brands in 2012.

The promotion of internal quality has contributed to the upgrading and updating of Geely's products. Emgrand EC7 has become a featured model for export in Geely and accounts for 40 percent of total export volume. Now, Geely has built up CKD and SKD factories in many countries like Russian, Indonesia, Ukraine, Uruguay, Egypt, Sri Lanka, Ethiopia, Iraq and so on.

It is learned that Geely regarded 2013 as an important year to deepening strategic transformation and set goals to accomplish the transition process from internationalization strategy to globalization strategy in 3 to 5 years, thus realizing the globalization of Geely's R&D, manufacturing and marketing.

External engine: quality inspection

The driving force of external "engine" contributed to Geely's export outperformance.

It is found that in Beilun manufacturing base, one of Geely Group's biggest manufacturing bases for export models, Ningbo Inspection and Quarantine Bureau participated in all the quality control phases including in-warehouse and out-warehouse of raw material, manufacturing process as well as logistics and distribution. Responding to the "trade facilitation" put forward by Central Committee, Geely built up a positive and cooperative relationship with Ningbo Inspection and Quarantine Bureau.

Ningbo Inspection and Quarantine Bureau treated Geely as a "test zone" and breakthrough point for implementing "trade facilitation" reform. The Bureau proposed Three Models, which includes micro-macro model, export and distribution model and autonomic inspection of storage model; and Two Measures, which are to extending service chain and supervising service in an all-around way, therefore involving in Geely's quality system and realizing export "soft upgrading".

Micro-macro model: synchronize inspection and manufacturing, parallel supervision and system, integrate tracing and after-sales, and extend micro-inspection of end products to macro-supervision of enterprise's quality assurance capability.

Autonomic inspection of storage model: Based on the requirements on inspection of storage set by the Bureau and operation standards set by the enterprise, the Bureau works to guarantee the inspection of storage by assessing loading personnel, checking loading record and verifying video.

Export and distribution model for spare parts: Based on the supervising methods of "in-storage declaration, out-storage verification and periodical supervision", the Bureau samples and inspects the spare parts in the store, and verifies the out-storage products efficiently.

Mao Kechen, Deputy Director of Ningbo Inspection and Quarantine Bureau in Beilun, pointed out that one big change in implementing "trade facilitation" by the Bureau is to lay more stress on cooperating with Geely in quality control, enhancing early warning of detection and analysis, and providing effective information support timely for Geely's production and management, rather than only focusing on requirements and statements.

Li Weiping, Vice General Manager of Zhejiang Geely Automobile, said that Geely's exports encountered many difficulties in the past, which includes long inspection cycle of whole-vehicle export, third-party loading inspection on CKD/SKD export to Africa, inspection of export after-sale spare parts in the supplying site, and the precondition to export whole-vehicle in Shanghai and the like. However, the Bureau's implementing "trade facilitation" measures in Geely has brought about fundamental changes to those traditional methods.

According to the statistics provided by Ningbo Inspection and Quarantine Bureau in Beilun, Geely exported automobiles at Ningbo port in 124 batches, amounting 32,171 units, with total export value of 0.24 billion dollars and keeping "zero record" on returns due to quality problem.

Since the Bureau changed its past port inspection methods and stepped into the quality control of Geely's industry chain, it realized barrier-free clearance and helped Geely buck the trend with soaring export growth, which set an outstanding example of "trade facilitation".



Posted in: Press Release

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