Chinese car companies have gone to sea and targeted the European market.
On February 17, Yu De, general manager of SAIC International, revealed at a media briefing that in 2022, SAIC Motor's overseas sales target will exceed 800,000 vehicles, and at the same time, SAIC motor will fully exert its strength in the European market, and it is expected that its own brands MG and MAXUS will sell 120,000 vehicles in Europe this year. If this target is achieved, Europe will be SAIC's first overseas regional market to achieve its "100,000-unit" target.
However, like other car companies, SAIC is still facing supply chain problems. Yu De said, "The challenges we face during this period are very big, but we are actively and effectively organizing all resources to overcome these situations. ”
In 2021, under the influence of multiple factors such as the epidemic and supply chain, many multinational car companies are significantly reducing their overseas business, Mercedes-Benz sold its Brazilian factory, Ford completely shut down its Indian factory, and GM sold its Indian and Thai factories.
While the established multinational car companies continue to shrink overseas markets, China's independent car brands "going to sea" have embarked on the fast track. Unlike in the past, when Southeast Asia and other regions were used as destination markets, more and more Chinese car companies are setting their sights on Europe.
Chinese car companies "going to sea" ushered in an outbreak period
In 2021, China's automobiles have achieved new milestones in going to sea. According to data from the China Association of Automobile Manufacturers, in 2021, China's automobile exports reached a record high of 2.015 million vehicles, breaking through the bottleneck of about 1 million vehicles that has lasted for many years.
Since 2012, when China's auto exports crossed the threshold of 1 million vehicles for the first time, the number of automobile exports has been hovering around 1 million in the past decade. Shenwan Hongyuan Securities analysis pointed out that China's auto exports have ushered in an explosive period.
Source: China Association of Automobile Manufacturers
Among the exports of 2.015 million units, independent car companies performed well, with SAIC Motor's export and overseas bases reaching 700,000 units, Chery Automobile exporting 270,000 units, and Great Wall Motor and Geely Automobile exceeding 100,000 units.
In 2021, SAIC Motor Passenger Vehicles sold a total of 697,000 new vehicles in more than 80 countries and regions overseas, an increase of 78.9% year-on-year. It is worth noting that its own brand sales accounted for more than 60%. Among them, saicel passenger car exports reached 290,000 units, an increase of 68% year-on-year; SAIC-GM-Wuling's annual overseas sales reached 146,000, an increase of 88% year-on-year.
Traditional car companies continue to seek new breakthroughs in "going to sea", and a number of new force car companies that have just started have also put the "going to sea" of the whole vehicle on the agenda.
In December 2020, Xiaopeng Motors delivered 100 G3 pure electric vehicles in Norway and will enter Sweden, Denmark and the Netherlands this year; on September 30, 2021, NIO's new ES8 officially entered the Norwegian market, while planning to enter at least 5 European countries in 2022; ideal cars that have been a few steps slower than other new forces in going to sea, are also studying the model of products and channels in overseas markets, and have established relevant teams.
In addition, the new second-tier forces, including Aiways and Nezha, as well as the new forces hatched by traditional car companies such as Dongfeng Lantu and BAIC Jihu, have also announced their own plans to go to sea.
Why do car companies pounce on the cake of "going to sea"?
According to the statistics of the China Association of Automobile Manufacturers, in 2021, China's automobile production will be about 26 million units, and the export volume of 2.015 million vehicles will account for about 7.8%, compared with 3.9% in 2020. However, the world's auto powers such as Germany and Japan often account for more than half of the output. People in the industry generally believe that there is still a huge room for improvement in China's automobile exports.
More importantly, the rapid development of new energy vehicles in recent years has opened a rare window period for Chinese car companies to "go to sea", and car companies hope to seize the opportunity.
According to the China Association of Automobile Manufacturers, in 2021, the sales volume of new energy vehicles in the Chinese market exceeded 3.5 million, and the market share increased to 13.4%. According to minsheng securities research report, China's new energy vehicle penetration rate has been comparable to the European market, in the global leading level.
Comparison of new energy vehicle penetration rates in major global markets. Source: Minsheng Securities
Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, said in a recent article that in order to achieve the carbon reduction target, many European governments have increased subsidies for new energy vehicles, Chinese products have also been recognized by European consumers, and the overseas new energy vehicle market has developed rapidly. The rapid expansion of the global electric vehicle market has provided opportunities for China's new energy vehicle exports.
Xu Haidong said that on the one hand, China's new energy vehicle products have good competitiveness in terms of mileage, vehicle performance, intelligent applications, etc., and have a good new energy industry supply chain and technical support.
On the other hand, new energy vehicles are new products, foreign traditional automobile companies are relatively slow in the development of new energy vehicles, there are fewer overseas competitors, and high brand barriers have not been established, which provides a better environment for the export of Chinese brand cars.
According to data from the China Association of Automobile Manufacturers, in 2021, China's exports of new energy vehicles totaled 310,000 units, an increase of 305% year-on-year. Xu Haidong mentioned that after deducting Tesla China's 160,000 exports, the export of new energy vehicles such as SAIC, BYD, Jiangqi Group, and Geely Holdings has performed well.
"Going to sea" is not just about selling cars
The "going to sea" of cars is not only about selling cars, but also needs to have multi-faceted cooperation such as supply chain, brand, pre-sale, and after-sales, as well as the localization of the entire system.
Yu De believes that the successful overseas development of automotive products is inseparable from the close coordination of domestic and foreign teams in products, services, supply chains and brands.
In addition, how to integrate into the local market and establish a brand is also a major test for car companies.
In the past, China's automobile "going to sea" won by price, and Wei Jianjun of Great Wall Motors once said that the key to creating brand value is concentration, to withstand the temptation can not rely on cost performance, to look at the long-term ten years without wavering. It takes at least a decade or more for consumer durables to establish a brand in order for consumers to recognize the brand.
In terms of brand value building, the new energy wave provides opportunities. According to the China Association of Automobile Manufacturers, in 2021, the European market has become the main incremental market for the export of new energy vehicles in the mainland, and the price of New Energy Vehicles of Chinese brands has the characteristics of "high quality and high price" in the European market, reaching 30,000 US dollars / vehicle.
In addition, it should be noted that external factors such as changes in overseas policies and international trade rules are also one of the problems that Chinese car companies have to face in exports. Wang Fengying, a deputy to the National People's Congress and general manager of Great Wall Motors, once said in the proposal of the two sessions that it is difficult to prevent overseas risks, and exchange rate issues, the rise of international trade protectionism, and the risk of laws and regulations all affect automobile exports.
However, for the future of Chinese car companies going to sea, Yu De showed full confidence. "Among so many countries in the world, one that can really be called an open market is China and the other is the United States." He said that The competition in China's auto market is fierce, consumer acceptance is wide, and different markets such as the first-tier, second-tier, and third-tier have experienced different ways of playing car companies, which will provide strong competitiveness for Chinese car companies to "go to sea".