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Is China's auto exports entering the "dead hole"?
In recent years, China's own-brand vehicles have had a great deal of enthusiasm and have explored mature markets such as Europe and the United States. They may either look for opportunities to participate in large international auto shows, or find local dealers to help themselves export, while others may seek opportunities to build factories in other countries.
But what frustrates the auto makers is that they have repeatedly hit the wall in the international market and encountered many unexpected difficulties. In particular, the European and American automobile access system is very strict, and sometimes people can't even enter the threshold. In the face of setbacks, it was claimed that China's auto exports have entered a "dead hole."
So, there is much hope for Chinese autos to go to the international market. How many years will it take? Dong Yang, executive vice president and secretary-general of the China Association of Automobile Manufacturers, believes that it is difficult to deduce the exact time for Chinese cars to enter mature markets. However, he predicted that the first to enter the mature market may be buses, special vehicles, and some special features of the car, and finally the car, especially luxury cars. The first car to be exhibited in North America or Western Europe may not necessarily become the mainstream of exports.
Huang Gang, deputy general manager of Dongfeng Commercial Vehicle Co., Ltd., said that Dongfeng Commercial Vehicles has just started its journey on the international market, such as Russia, Iran and some developing countries. In the next step, the company will cut into mature markets including European and North American markets on the basis of brand and quality construction. But it will certainly take some time to do some preliminary preparations.
However, Huang Gang also believes that from a pragmatic point of view, Dongfeng commercial vehicles still have to base themselves on the developing market and then enter the South American market. Everything is ready, and then enter the mature market.
Wang Fengying, general manager of Great Wall Motor Co., Ltd., believes that the two factors, the appreciation of the renminbi and the depreciation of the US dollar, have a significant impact on China’s auto exports. This pressure is very high. At this time, Chinese cars need better management, namely lean management.
She believes that if Chinese autos want to truly establish their competitiveness in the international market, they will not rely on simply selling cars or increasing sales, but rather seeing whether or not these vehicles have added value. The establishment of additional value depends on improving the quality of the product and thus enhancing the brand. This will bring better profit margins.
Suppliers will be drowned by high costs?
Many of the foreign CEOs attending the meeting came from parts and components companies. Therefore, they are more concerned about the suppliers' living environment and cost. The president of Delphi Asia-Pacific QuanZaZe used “very severe†to describe the pressure on suppliers.
He said that in order to cope with rising costs, Delphi China has been studying how to find high-quality local suppliers. At the same time, the company designs engineering around the Chinese market rather than designing it for the headquarters.
Christian Marsais, vice president of Valeo Group in China, said that there are many benefits brought by local suppliers, but many local suppliers still need improvement in terms of quality. Therefore, they can only be seen as potential suppliers. In terms of cost, OEMs face considerable pressure. They usually hope that the cost in China will be at least 10% to 20% lower than the cost in foreign countries. This is an internationally accepted expectation. In terms of innovative products, their demands are getting higher and higher.
Ray Weitai, executive director of Magna China, said that in fact, both suppliers and OEMs have the pressure of cost. How to find a good communication platform and then find a solution is critical. He hopes that customers can allow suppliers to enter the cost-reducing projects earlier. “Comparatively, some of the more mature joint ventures will give us more time to prepare, so that we can join together to reduce costs. â€
Lei Weitai also noted that some people talked about the disillusionment of suppliers. He said that the prices of energy and raw materials are constantly rising, which makes many manufacturers feel very disappointed and are under great pressure. And he will encourage them now. The future is hopeful and should not be drowned in difficulties.
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