Chinese self-owned auto brand takes root in Latin America

Source:Globaltimes.cn Published: 2014-2-20 11:07:02

Since the Chinese government initiated the "going out" strategy in 1999, Zhejiang Geely Holding Group has made active measures to respond to the policy and to expand its overseas market. It has successively bought stakes in the British Manganese Bronze, took over the world's second largest automatic transmission manufacturer DSI, and completed the acquisition of world high-end brand Volvo. Globally, Geely's products perform well in Eastern Europe, Middle East and North Africa and Central and South America. Besides, as South America's largest and the world's fifth largest car market, Brazil has become the battleground of auto makers around the world, including Geely. Geely launched Emgrand EC7 on January 22, 2014, a new car for Latin American, marking that Geely has formally stepped into the Brazilian car market.

Compared with the Brazilian market, the Uruguayan market acts as a stepping stone for Geely to enter the Brazilian market due to its advantages including less cost in the establishment of the plants, relatively simpler labor relations and the tax structure, favorable political and economic environment and loose foreign exchange control. In 2011, Geely started business negotiations with Uruguay's NORDEX, a leading specialist auto assembly provider with more than 50 years of experience in auto assembly and once assembling passenger cars models such as Renault, Peugeot and Citroen. Geely started the construction of the plant after the signing of the launch agreement with Uruguayan NORDEX during Chinese President Xi Jinping's visit to Uruguay in June, 2011, and basically completed the construction till September 2012. In June 2013, the plant was well equipped and prepared, and then the preparation works such as workers recruitment and training have were developed successively. The Uruguayan plant started a trial production in July, 2013 and the first Geely car in Latin America was off line on August 15.

Covering an area of 11,800 square meters, Geely's plant in Uruguay has two welding lines, an assembly line and a test line. It plans to produce the models of Geely EC7, EC7-RV, GC2 and GX2, and its maximum capacity can reach to 20,000 units in straight run. Although the factory is located in Uruguay, its main purpose is to radiate the two markets in Brazil and Argentina through the agreement with South America Common Market. Therefore, vehicles assembled in this factory are mainly sold to Brazil and Argentina. The first batch of EC7 models launched in Brazil will adopt KD mode, being first assembled in Uruguay, and then sold to Brazil. The specific mode of operation is stamping process and will be conducted in China. The welding, painting and assembly process will be carried out in NORDEX. As for purchase of related components and parts, five parts such as hubs, tires and batteries will be purchased locally. Geely will then gradually increase the procurement species annually to meet the local requirements of regulations.



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