After experiencing the great impact of the financial crisis, Chinese auto exports to the Latin American market began to show significant growth, and Chinese auto companies represented by Chery and the Great Wall are accelerating their steps into Latin America.
"This year's growth is indeed very large." On October 25, Zhao Jinli, head of the Great Wall Motors Americas Market, told this reporter that "the Great Wall factory in Venezuela had waited for the approval of the government and all the equipment had been transported. Everything went smoothly and it can be put into production in two months."
Great Wall has spent more than one year in the KD plant in Venezuela with a design capacity of 20,000-2.5 million. At the same time, the Great Wall is also paying close attention to the inspection of the Brazilian market. The plan to build a factory in Brazil is also in full swing.
As the first Chinese automaker to build a plant in South America, after Uruguay, Chery Automobile announced that it will invest US$400 million to establish a new plant in the state of Sao Paulo, Brazil.
It is understood that the Chery Brazil plant project is planned to be implemented in two phases: the first phase of investment is 134 million U.S. dollars, and the capacity of 50,000 vehicles per year will be formed after it is completed and put into operation in 2013. The second phase of the investment is 266 million U.S. dollars, and the factory will eventually form an annual production capacity of 150,000 vehicles.
According to the latest statistics, during the first eight months of this year, the sales of Chinese auto exports to South American countries have all experienced significant growth, with the most significant increase in exports to Brazil, which is as high as 659%.
The second Chinese "China's auto companies should attach great importance to the Latin American market." Zhu Yi, an engineer at China National Petroleum Research Institute, which just concluded a visit to Mexico, Argentina, and Chile, told reporters.
In the post-financial crisis era, accompanied by the rapid rebound of the South American auto market, the South American auto market is currently occupying the second and third position in Chinese auto exports after the Middle East and Africa.
Authoritative organizations predict that Brazil, the largest market in South America, may surpass Germany to become the fourth-largest automobile market in the world this year. Record low interest rates and tax incentives helped Brazil emerge from the recession in 2009. The economic growth rate in 2010 was 6.4%, the fastest growth in 20 years.
“Brazil has the highest price for the highest cost of vehicles, the company’s burden of tax burdens, and the production costs are putting a lot of pressure on local companies, which gives importers an opportunity. “The opportunity for Chinese companies in Brazil lies in its ability,†said Zhang Junyi, Roland Berger’s senior manager. There is a joint economic and trade relationship with traditional Latin American countries. In particular, some European and American companies are considering Brazil as a production base to export to China. This must arouse our concern. â€
“This year, the Great Wall Motor’s export volume to Latin America is three times that of last year.†Great Wall Motor Zhao Jinli told reporters, “Till the end of this year, about 10,000 units. Last year, about three or four thousand.†From this year, the Great Wall exports to Latin America accounted for sales The proportion of total exports has increased from 10% to 17%.
“Latin America is a major growth point for us. Starting this year, Latin America is the main growth point for the entire automotive export market. It will grow faster next year because the demand is very high. In addition, Chinese products are gradually opening up the market. "The relevant exporters of Gonow Automobile told reporters that "Chile and Brazil are the number one priority markets, followed by Colombia, Uruguay, and Ecuador. Venezuela, because of its strong politics, is a separate market."
Latin America Opportunities Latin American countries are mostly friendly relations with the Chinese government and the economic level is rising rapidly. This is the fundamental reason for the huge potential in the Latin American automotive market. From a technical point of view, the threshold of the Latin American market is not high, and China is basically at a level, the North American market is the first grade, the second grade is the Pan-European region, the Central and South American market is the third grade.
At present, Chile is China's largest auto export market in the South American region. Many independent brands have entered the Chilean market, such as the Great Wall, Chery, Geely, etc., and China has become the third largest automobile importer in Chile after Japan and South Korea.
Zhu Yi believes that the current advantages of Chinese auto exports to Chile mainly include two points. China and Chile have signed a free trade agreement and auto exports enjoy zero tariffs. China’s own brands have risen rapidly in recent years, and there are numerous types of vehicles, most of which are economic vehicles, which are in line with the demand characteristics of the Chilean auto market; lower production costs make the advantages of China’s auto products occupying Chile’s auto market share more and more significant. .
However, the situation in the Latin American market is relatively complicated. The political situation is unstable, the policy changes frequently, and the economy is highly dependent. For Chinese auto companies, opportunities and risks coexist. “Everybody loves talking about the opening up of the Brazilian market and actually ignores the deeper meaning. That is to say, it is to be liberal and strict. Specifically, the standards, such as the requirements for oil, and the requirements for power, are all very high. For example, local regulations in Brazil require that the car be a hybrid engine because the local gas is relatively developed and the mixed fuel is used earlier. The demand is 22%, according to the relevant person of Gio Auto.
"As the third largest market in Latin America, Mexico has formed a vicious circle. Many multinational companies have set up factories in Mexico, but most of the new products are used for export, and Mexico is filled with used cars from the United States. For this reason, the Mexican government is in a big headache. Zhu Yi, who has just returned from Mexico, feels deeply.
Zhu Yi suggested that Chinese auto companies should focus on the Mexican market. The Mexican market is relatively large. Of the vehicle ownership, half of the cars have been in service for more than 16 years and need to be updated. The local government is also very troubled by the environmental problems caused by the import of a large number of old cars. However, under the North American Free Trade Area Agreement, Mexico cannot restrict the import of cars. Chinese cars are cost-effective and are suitable for the local market.
"Mexico is certainly a key market, but do not put Mexico into the category of Central America, because Mexico is based on the standards of North America. At present, China has almost no strength to consider the Mexican market." The relevant person said.
In fact, the threshold for building a factory in Mexico is very high. “In fact, Mexico has set a very high threshold, and it is necessary to produce more than 50,000 annual production capacity in order to enjoy local preferential policies. Both China FAW and Changan had thought of entering this market and later disappeared.†Great Wall Motor Zhao Jinli told reporters.
As the second largest auto market in South America, Chinese companies also face great problems when they enter Argentina. “Now everyone is not too angry with Argentina and can only radiate from other markets to Argentina. First, the local political situation is unstable, and the second country has a very high tariff. For example, setting up a factory in Uruguay can radiate Argentina.†reporter.
The road to building a plant At present, one of the most prominent features in Latin America is the integration trend. “To seize the integrated market is also very good for everyone to do the Latin American market. At present, the South American Community is establishing a unified technical regulations.†Zhu Yi said.
The process of integration in Latin America is accelerating. For Chinese companies, the so-called grasp of the trend of integration is to use the low-tariff or zero-tariff provided by the free trade agreements between these integrated organizations to first enter a country and then export it to other countries. , including the establishment of a factory.
In fact, currently China's auto exports to Latin America mainly face two problems. The first is that Latin America has a long way to go. It must consider the advancement of sales and build factories in the region. Second, in terms of language, the Central and South American region is basically Spanish. The people who understand both Spanish and cars are in short supply.
“We have not yet considered setting up a plant in Latin America, but there is no doubt that this is a trend.†The relevant person of the Gonow Group told reporters, “For example, Volvo’s trucks have only two plants in the world. One of them is in Brazil. One in Europe, this is Volvo's strategy."
As a leader in Chinese auto exports to the Latin American market, Chery's case in Latin America shows that the path of saving the country by curve can not be achieved in South America. "The problems of production capacity limitations, spare parts supply, and substandard technological capabilities cannot be ignored. Chery will now move the factory to Brazil, which will undoubtedly result in a significant increase in costs," said the industry insider.
Chery aimed at the Brazilian automotive market two years ago and established a joint venture with Brazilian company JLJ in Uruguay, a neighboring country, to import Chery auto parts from China for final assembly and then sell it to Uruguay, Argentina and Brazil. As the assembly plant's annual production capacity is limited to 25,000 vehicles, Chery must enter Brazil.
Whether building a plant or not is actually related to the market environment, and many times it is closely linked with the policy. “Some countries in South America must go to build factories, and some are not. In Brazil, for example, its currency is highly variable against the exchange rate. Last year, the local currency depreciated by 60%, and the cost of imported vehicles will increase a lot. Now Brazil’s currency It has begun to strengthen, leading to a sharp drop in the cost of its imports, even lower than the cost of local production, so this issue does require a good trade-off.†Great Wall Motor Zhao Jinli said.
Long-term research on the Latin American market shows that Chinese companies have a foothold in the South American market. In the long-term, there are two things that must be done: products must meet the requirements of the local market; in order to increase product competitiveness, products must be localized. "Now, we have not done it yet. Chinese companies must work hard in this direction. Enterprises have factories in the local area and they can develop. Without factories, they have to withdraw."
“The key point at the moment is that Chinese companies do not have the experience of a truly international strategy, nor do they have real leaders with international ambitions.†The above-mentioned sources finally stated.
"This year's growth is indeed very large." On October 25, Zhao Jinli, head of the Great Wall Motors Americas Market, told this reporter that "the Great Wall factory in Venezuela had waited for the approval of the government and all the equipment had been transported. Everything went smoothly and it can be put into production in two months."
Great Wall has spent more than one year in the KD plant in Venezuela with a design capacity of 20,000-2.5 million. At the same time, the Great Wall is also paying close attention to the inspection of the Brazilian market. The plan to build a factory in Brazil is also in full swing.
As the first Chinese automaker to build a plant in South America, after Uruguay, Chery Automobile announced that it will invest US$400 million to establish a new plant in the state of Sao Paulo, Brazil.
It is understood that the Chery Brazil plant project is planned to be implemented in two phases: the first phase of investment is 134 million U.S. dollars, and the capacity of 50,000 vehicles per year will be formed after it is completed and put into operation in 2013. The second phase of the investment is 266 million U.S. dollars, and the factory will eventually form an annual production capacity of 150,000 vehicles.
According to the latest statistics, during the first eight months of this year, the sales of Chinese auto exports to South American countries have all experienced significant growth, with the most significant increase in exports to Brazil, which is as high as 659%.
The second Chinese "China's auto companies should attach great importance to the Latin American market." Zhu Yi, an engineer at China National Petroleum Research Institute, which just concluded a visit to Mexico, Argentina, and Chile, told reporters.
In the post-financial crisis era, accompanied by the rapid rebound of the South American auto market, the South American auto market is currently occupying the second and third position in Chinese auto exports after the Middle East and Africa.
Authoritative organizations predict that Brazil, the largest market in South America, may surpass Germany to become the fourth-largest automobile market in the world this year. Record low interest rates and tax incentives helped Brazil emerge from the recession in 2009. The economic growth rate in 2010 was 6.4%, the fastest growth in 20 years.
“Brazil has the highest price for the highest cost of vehicles, the company’s burden of tax burdens, and the production costs are putting a lot of pressure on local companies, which gives importers an opportunity. “The opportunity for Chinese companies in Brazil lies in its ability,†said Zhang Junyi, Roland Berger’s senior manager. There is a joint economic and trade relationship with traditional Latin American countries. In particular, some European and American companies are considering Brazil as a production base to export to China. This must arouse our concern. â€
“This year, the Great Wall Motor’s export volume to Latin America is three times that of last year.†Great Wall Motor Zhao Jinli told reporters, “Till the end of this year, about 10,000 units. Last year, about three or four thousand.†From this year, the Great Wall exports to Latin America accounted for sales The proportion of total exports has increased from 10% to 17%.
“Latin America is a major growth point for us. Starting this year, Latin America is the main growth point for the entire automotive export market. It will grow faster next year because the demand is very high. In addition, Chinese products are gradually opening up the market. "The relevant exporters of Gonow Automobile told reporters that "Chile and Brazil are the number one priority markets, followed by Colombia, Uruguay, and Ecuador. Venezuela, because of its strong politics, is a separate market."
Latin America Opportunities Latin American countries are mostly friendly relations with the Chinese government and the economic level is rising rapidly. This is the fundamental reason for the huge potential in the Latin American automotive market. From a technical point of view, the threshold of the Latin American market is not high, and China is basically at a level, the North American market is the first grade, the second grade is the Pan-European region, the Central and South American market is the third grade.
At present, Chile is China's largest auto export market in the South American region. Many independent brands have entered the Chilean market, such as the Great Wall, Chery, Geely, etc., and China has become the third largest automobile importer in Chile after Japan and South Korea.
Zhu Yi believes that the current advantages of Chinese auto exports to Chile mainly include two points. China and Chile have signed a free trade agreement and auto exports enjoy zero tariffs. China’s own brands have risen rapidly in recent years, and there are numerous types of vehicles, most of which are economic vehicles, which are in line with the demand characteristics of the Chilean auto market; lower production costs make the advantages of China’s auto products occupying Chile’s auto market share more and more significant. .
However, the situation in the Latin American market is relatively complicated. The political situation is unstable, the policy changes frequently, and the economy is highly dependent. For Chinese auto companies, opportunities and risks coexist. “Everybody loves talking about the opening up of the Brazilian market and actually ignores the deeper meaning. That is to say, it is to be liberal and strict. Specifically, the standards, such as the requirements for oil, and the requirements for power, are all very high. For example, local regulations in Brazil require that the car be a hybrid engine because the local gas is relatively developed and the mixed fuel is used earlier. The demand is 22%, according to the relevant person of Gio Auto.
"As the third largest market in Latin America, Mexico has formed a vicious circle. Many multinational companies have set up factories in Mexico, but most of the new products are used for export, and Mexico is filled with used cars from the United States. For this reason, the Mexican government is in a big headache. Zhu Yi, who has just returned from Mexico, feels deeply.
Zhu Yi suggested that Chinese auto companies should focus on the Mexican market. The Mexican market is relatively large. Of the vehicle ownership, half of the cars have been in service for more than 16 years and need to be updated. The local government is also very troubled by the environmental problems caused by the import of a large number of old cars. However, under the North American Free Trade Area Agreement, Mexico cannot restrict the import of cars. Chinese cars are cost-effective and are suitable for the local market.
"Mexico is certainly a key market, but do not put Mexico into the category of Central America, because Mexico is based on the standards of North America. At present, China has almost no strength to consider the Mexican market." The relevant person said.
In fact, the threshold for building a factory in Mexico is very high. “In fact, Mexico has set a very high threshold, and it is necessary to produce more than 50,000 annual production capacity in order to enjoy local preferential policies. Both China FAW and Changan had thought of entering this market and later disappeared.†Great Wall Motor Zhao Jinli told reporters.
As the second largest auto market in South America, Chinese companies also face great problems when they enter Argentina. “Now everyone is not too angry with Argentina and can only radiate from other markets to Argentina. First, the local political situation is unstable, and the second country has a very high tariff. For example, setting up a factory in Uruguay can radiate Argentina.†reporter.
The road to building a plant At present, one of the most prominent features in Latin America is the integration trend. “To seize the integrated market is also very good for everyone to do the Latin American market. At present, the South American Community is establishing a unified technical regulations.†Zhu Yi said.
The process of integration in Latin America is accelerating. For Chinese companies, the so-called grasp of the trend of integration is to use the low-tariff or zero-tariff provided by the free trade agreements between these integrated organizations to first enter a country and then export it to other countries. , including the establishment of a factory.
In fact, currently China's auto exports to Latin America mainly face two problems. The first is that Latin America has a long way to go. It must consider the advancement of sales and build factories in the region. Second, in terms of language, the Central and South American region is basically Spanish. The people who understand both Spanish and cars are in short supply.
“We have not yet considered setting up a plant in Latin America, but there is no doubt that this is a trend.†The relevant person of the Gonow Group told reporters, “For example, Volvo’s trucks have only two plants in the world. One of them is in Brazil. One in Europe, this is Volvo's strategy."
As a leader in Chinese auto exports to the Latin American market, Chery's case in Latin America shows that the path of saving the country by curve can not be achieved in South America. "The problems of production capacity limitations, spare parts supply, and substandard technological capabilities cannot be ignored. Chery will now move the factory to Brazil, which will undoubtedly result in a significant increase in costs," said the industry insider.
Chery aimed at the Brazilian automotive market two years ago and established a joint venture with Brazilian company JLJ in Uruguay, a neighboring country, to import Chery auto parts from China for final assembly and then sell it to Uruguay, Argentina and Brazil. As the assembly plant's annual production capacity is limited to 25,000 vehicles, Chery must enter Brazil.
Whether building a plant or not is actually related to the market environment, and many times it is closely linked with the policy. “Some countries in South America must go to build factories, and some are not. In Brazil, for example, its currency is highly variable against the exchange rate. Last year, the local currency depreciated by 60%, and the cost of imported vehicles will increase a lot. Now Brazil’s currency It has begun to strengthen, leading to a sharp drop in the cost of its imports, even lower than the cost of local production, so this issue does require a good trade-off.†Great Wall Motor Zhao Jinli said.
Long-term research on the Latin American market shows that Chinese companies have a foothold in the South American market. In the long-term, there are two things that must be done: products must meet the requirements of the local market; in order to increase product competitiveness, products must be localized. "Now, we have not done it yet. Chinese companies must work hard in this direction. Enterprises have factories in the local area and they can develop. Without factories, they have to withdraw."
“The key point at the moment is that Chinese companies do not have the experience of a truly international strategy, nor do they have real leaders with international ambitions.†The above-mentioned sources finally stated.
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