· Autonomous car companies are keen to build factories overseas to meet foreign gold panning

Since the beginning of this year, independent auto companies will continue to expand overseas markets in the context of declining domestic market, and will establish factories in many places. Since 2014, a number of independent car companies have confirmed or announced that they will build new plants overseas, mainly in South America, Southeast Asia and Europe. Recently, as the domestic market growth rate has begun to slow down and market competition has intensified, the way to enter the overseas market has gradually become the development trend of major independent car companies, along with the policies and tariffs of many countries on importing complete vehicles. “Restrictions”, overseas investment and construction seems to have become the mainstream export method.

South American market is most favored by independent car companies

On August 28th, the Chery Brazil plant was announced. Chery is the first Chinese passenger car company to invest in Brazil. The Brazilian plant is also the largest auto plant independently built by Chery, with a total investment of 400 million US dollars. In the past year, a number of independent auto companies have announced plans to build factories in the South American market. At the beginning of last year, Great Wall Motors' partner in Brazil, Latin American Motors (LAM), announced that Great Wall Motor plans to be in 2014. The Group has built its own plant with an initial production capacity of 50,000 vehicles per year. This year, Changan Group plans to establish a complete vehicle assembly plant in overseas markets, including Brazil. The new assembly plant of JAC in Brazil is scheduled to start production in 2015. It can produce 100,000 cars a year and will become the largest factory in Jianghuai. In addition, both Geely and BYD plan to start production in Brazil this year, while Lifan Motors launched the “South American Strategy” to upgrade the existing Uruguay plant.

Some analysts predict that Brazil, the largest market in South America, may surpass Germany to become the world's fourth largest auto market this year. By 2016, Brazil is expected to become the world's third largest auto market after China and the United States. Therefore, the South American auto market is destined to be a must for car companies, and Chinese independent brands are constantly striving for this. At present, South America has become China's largest automobile export market. According to relevant data, in 2013, China exported 286,500 vehicles to the region, a year-on-year increase of 18.9%, accounting for about 30% of China's total automobile exports.

The vehicle export is not as good as the local factory

At present, China's auto export market is dominated by developing countries, mainly in South America, the Middle East, Eastern Europe and other countries. In 2013, four of the top 10 exporters of Chinese autos were in South America, namely Chile, Peru, Colombia, and Uruguay. Among the South American countries, the Brazilian market is growing rapidly. Chery, Jianghuai, Lifan, Geely, Changan, BYD and other independent brands export a large number of models to Brazil every year. China's own brands, which have fallen in the market for nine consecutive months in China, have emerged in the Brazilian market. According to statistics, 12 of the 51 brands in the Brazilian auto market are from China, and China has become the “biggest brand exporter”.

However, with the increase in sales of Chinese brands in the Brazilian market in 2012, Brazil began to impose high tax rates on imported cars, which has hit Chinese auto brands that have not achieved localized production of parts. Due to the large number of uncertainties, China's automobile overseas development road faces many problems, and it has fluctuated greatly in recent years. Last year, the average price of China's auto exports fell sharply, down 6% year-on-year. Such a sharp decline also had a serious impact on the profits of vehicle companies. Since the beginning of this year, China's auto exports have continued to decline year-on-year.

Many developing countries are now adopting similar trade policies with China to encourage localized production and curb import of complete vehicles. In addition, the high cost and large fluctuations in the demand for overseas vehicle manufacturers have made the internationalization of self-owned brand automobile companies tortuous. Localized production as a model for the long-term layout of a certain automobile market will become a trend. Therefore, the strategy of establishing a factory overseas can not only avoid various risks, but also provide employment and taxation, and it is easy to get support from the local government. It can also enable local consumers to generate trust in Chinese brands, and market share can be made even bigger. . On the other hand, building factories overseas can overcome some of the “bottlenecks” in China’s auto exports. After the export of autonomous vehicles, overseas after-sales service has always been a major difficulty. Compared with international large enterprises, the sales and service network of domestically produced vehicles is small and the funds are small. It is impossible to entrust large companies to act as full agents. Only after the local factories are established, these problems can be better solved.

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Self-owned car enterprises to build factories overseas

Chery Automobile

At the beginning of 2013, Chery Automobile announced that it will build a complete vehicle assembly plant in Malaysia. The model is to assemble CKD in full parts, with a capacity of 10,000 units in the first phase. As the market expands in the future, its capacity plan will increase to 20,000 units. In addition to the new plant in Malaysia, as of the end of last year, the number of Chery overseas plants has reached 17 and the production capacity has reached 210,000. At the end of March 2014, Chery Automobile Philippines announced its plan to build a plant, which will be Chery's third factory in Asia outside China. In the second half of 2014, the Chery Brazil plant will be officially put into production. Chery will become the first passenger car company in China to start production in Brazil, and Chery's position in the Brazilian market will also undergo qualitative changes.

Great Wall Motor

On May 20, Great Wall Motor signed a tripartite agreement with the Russian Tula State Government and the Tula State Public-Private Partnership Development Group to establish a wholly-owned subsidiary in Tula, Russia, to invest in a production base. In addition to building a factory in Russia, Great Wall Motor has already started production at the KD (Parts Assembly) plant in Bulgaria and Ecuador. After the follow-up project is gradually determined and put into production, there will be 24 overseas KD (semi-bulk) assembly plants in 2015, with an annual overseas production capacity of 500,000 units and KD annual sales of more than 300,000 units.

BYD Auto

BYD is accelerating its pace of going global. It not only accelerates investment in the Middle East and Africa, but also promotes investment in North America and South America, and continues to expand the global layout. After the establishment of the iron battery and electric bus factory in the United States, it plans to In Brazil, investing $100 million to build a complete vehicle plant that can reach an annual capacity of 4,000 electric buses. Currently, BYD has four assembly plants in the Middle East and Africa, located in Iraq, Egypt, Sudan and Ethiopia. BYD also plans to build a final assembly plant in Saudi Arabia, which will provide complete vehicles and parts to the local area.

Lifan Motors

At the beginning of this year, Lifan Motors announced that it will invest US$20 million in a joint venture with ZAM AZAM SPRING, the largest distributor of local Iraqi companies. In early March, the plant was officially put into operation. This is the company's eighth overseas auto assembly plant after Russia, Uruguay, Iran, Ethiopia, Azerbaijan, Ukraine and Vietnam. In addition, Lifan also plans to build a complete vehicle assembly plant with an annual output of 30,000 units in Brazil, which is expected to start construction within the year.

Geely Automobile

In January of this year, Geely announced its entry into the Brazilian market and planned to build a joint venture plant in the local area. It will produce and sell two models of the Emgrand EC7 and the Global Hawk GC2 in Brazil. The new plant will have an annual production capacity of 20,000 units, and Geely will export to Brazil in the initial stage. The vehicles are assembled by their Uruguay factory and parts are produced in China. Currently, Grupo Gandini, the import agent of Volvo's Volvo in Brazil, will help Geely sell.

Jianghuai Automobile

Recently, Jianghuai Automobile announced that its new assembly plant in Brazil is scheduled to start production in 2015. It will produce 100,000 vehicles per year and will become the largest overseas factory of JAC. The total investment of the project is 3.7 billion yuan. In addition, Jianghuai Automobile is currently preparing to enter the Indian market, and will build a local factory to produce cars and sell passenger cars, medium and heavy goods vehicles. If the plan is implemented, Jianghuai will become the third Chinese car company to enter India after Futian and the Great Wall.

Changan Automobile

In 2013, Changan and Russian auto dealer Ilito officially signed an agreement to represent Changan's own-brand sedan in Russia. The two sides also intend to build production and assembly plants in Russia, import Changan's spare parts to Russia for assembly, and achieve localized production through joint ventures, which will increase Changan's product investment in Russia. In addition, Changan Automobile will enter the Iranian market this year and has already identified its partners. Changan Automobile has established five overseas factories in Malaysia, Vietnam, Iran, Ukraine and the United States.

Shanghai Auto

In 2013, SAIC Motor Vehicle Company's overseas sales volume was about 10,000 vehicles. Although the export volume is quite different from that of Geely and Chery, its overseas market expansion has begun to increase gradually. Following the cooperation between the MG brand and the Thai Zhengda Group in the Thai market at the end of 2012, SAIC also cooperated with a local factory in Egypt in June last year to produce the Roewe 750 model by means of CKD. In January of this year, SAIC Group signed an agreement with Thailand Zhengda Group to form a joint venture to establish Datong Auto (Thailand) Co., Ltd. On June 19, SAIC's factory in Egypt was officially put into production. The first model was the Roewe 750.

Brilliance Auto

On August 14, Italian Prime Minister Matteo Renzi told the media in Termini Imerese, Sicily, that during the recent visit of the Italian government, the Italian government has established a contact mechanism with Brilliance China Automotive Holdings Co., Ltd., which hopes to establish a factory in Italy. Manufacturing vehicles and further expansion overseas.

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