China’s carmakers develop an appetite for foreign markets

Cracking export markets in Europe and the US is the next frontier for China’s global-minded carmakers. Next year, for example, Geely Automobile, based in Zhejiang, will start sales of its Lynk & Co brand in Europe after launching in China later this year.

Rival Chinese automaker Great Wall already sells a diesel pick-up truck in Italy, and plans to ramp up sales as well. This month, it made its global ambitions clear when it announced it would like to acquire Fiat Chrysler’s Jeep brand, though no formal discussions have started. Great Wall is also building a full assembly plant in Russia scheduled to open in 2018.

Chery is currently the biggest Chinese auto exporter, mainly to emerging markets, while Great Wall has the most experience exporting to developed markets, notably Australia, though volumes are quite low, says Janet Lewis, head of transport at professional services company Macquarie in Tokyo. GAC Trumpchi, the highest rated Chinese brand for quality, according to consultancy JD Power, plans to launch exports to the US in either 2018 or 2019.

All see conquering the top international markets as the route to becoming truly global. “Chinese brands are where the Japanese were in the 1960s and 1970s, or where Korean brands were in the 1970s or 1980s,” says Bill Russo managing director of Gao Feng Advisory in Shanghai.

Chinese automakers have long been reluctant to export. The country became the world’s largest car market in 2009, with some of the fattest margins on car sales, and Chinese brands have privileged access. Many have joint ventures with international companies that manufacture in China, giving the Chinese partners access to technology as well.


Number of vehicles produced in China in 2016

Going abroad means fighting tooth and nail for comparatively thin margins against the likes of Volkswagen and Hyundai, and some brands prefer to consolidate their markets at home before venturing abroad. Compared to the 28m Chinese vehicles produced…

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