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On February 20th, the reporter learned from Cui Huashan, deputy director of Hualing Automotive Overseas Division that Valin Xingma has already set up a funded company in Russia and plans to set up a plant in Russia. This news undoubtedly increased the popularity of this round of Chinese truck companies' overseas investment and setting up factories. Since the end of last year, JAC, Dongfeng, Futian and other truck companies have announced or have disclosed through the media a series of projects in Brazil, India, Russia, and other places to set up factories. This shows that the overseas market strategy of Chinese truck companies has already depended mainly on product output. Product output and industrial output, capital output in the same direction of transformation.
Domestic market competition is fierce
For Chinese truck companies, in the years before 2010, the Chinese market was considered by some companies as the “Garden of Eden,†but since the second half of 2011, good luck has ceased. In 2012, the truck market continued to linger. "China's auto industry production and sales alerts" data show that from January to December last year, heavy truck sales fell 27.78% year-on-year, light truck sales fell 11.47% year-on-year. With the shrinking market and excess production capacity, truck companies have resorted to all competitions to compete in the same industry. In the words of Liu Hanru, chairman of Valin Xingma Automobile, some companies “had not sold their cars to the point where they had no money,†and competition has become fierce.
The industry believes that the 2013 truck, especially the heavy truck capacity surplus will continue to increase. According to incomplete statistics, in 2012, China's medium- and heavy-duty truck industry will have a total capacity of approximately 1.545 million under construction and new construction, including 420,000 new production capacity, which will be gradually released in 2013 and in the coming years.
For example: The FAW Jiefang Qingdao Plant will build a truck project with an annual production capacity of 100,000 vehicles in Chengdu, including an annual output of 40,000 light trucks and 60,000 medium and heavy trucks, which is expected to be completed in 2013. The capacity of Dongfeng Commercial Vehicles under construction and new construction is approximately 130,000 vehicles, of which 40,000 commercial vehicles of Dongfeng Commercial Vehicles have built 40,000 capacity. The Dongfeng Nissan Chai Reform and Expansion Project was launched in Hangzhou last March, and it will be put into operation as soon as the end of this year. It will eventually reach 50,000 medium-to-high-end heavy truck production capacity; Sinotruk's new and under construction capacity will be 380,000.
The overcapacity in the domestic market and fierce competition have forced companies to extend their reach into the broader international market. Last year, China National Heavy Duty Truck, Valin Xingma and other companies tasted the sweetness of their products. In order to better expand the international market, the strategy of investing and setting up factories abroad has naturally entered the vision of corporate decision makers and has received much attention.
Guo Tong, deputy director of the China Automotive Strategic Development Research Center at Tianjin University, believes that export strategies will generally experience product output, establishment of sales channels, distribution of service guarantees, investment in joint ventures, overseas mergers, and integration into the domestic financial system. Many multinational companies in China follow this clue and move forward. Chinese enterprises will also gradually deepen their overseas development. "It is time for Chinese truck companies to set up factories overseas for large-scale investment," said Guo Wei.
Accumulation of experience, ability to promote transformation
China's truck companies can step out of overseas investment and set up factories, and China's car companies and the country where they are located can all benefit from the project. It is similar to many of China's passenger car companies that are keen to have a joint venture. Overseas partners want to produce profits, better products and advanced technology. This determines that the technical level of Chinese truck companies should be set above the country where the factory is located. Otherwise, people use their own country. The product can be, there is no need to cooperate with the Chinese car companies.
China's truck industry started from the 1950s, and today's production and sales scale has ranked first in the world, and it has made great strides in technology. Large-displacement electronically controlled supercharged engines, high-capacity axles and frames, and full-floating shock-absorbing cabs are among the leading technologies in most developing countries. This has created a great opportunity for Chinese truck companies to set up factories in these countries. Prerequisites.
In addition to the improvement in the level of technology, the accumulation of experience in expanding overseas markets is also an important factor in promoting companies to accelerate the transformation of their export strategies. Before 2000, Chinese truck companies seldom ventured into overseas markets, and setting up factories for foreign investment seemed even more impractical at the time. Since 2001, JAC has set up factories in Southeast Asia to be the first to eat crabs. After several years of hard work, JAC has established light truck assembly plants in Vietnam, Malaysia, and Indonesia. In recent years, it has also established two factories in the Middle East. In 2002, Dongfeng began to build an assembly plant in Iran. In 2003, it built a factory in Malaysia and in 2006 it also built a factory in Ukraine. Fukuda started earlier and established KD assembly plants in Ukraine and Pakistan in 2004. After more than 10 years of exploration, Chinese truck companies have accumulated a wealth of experience. In the strategic transformation of overseas markets, these experiences will be used for important purposes.
The main production method is assembly.
There are two main production methods for truck companies in overseas factories, namely SKD and CKD. SKD is a large-scale assembly. Chinese companies will pack and export the main assembly of the vehicle and then assemble the vehicle into an overseas factory. CKD is a complete assembly of spare parts. Overseas factories are used to assemble parts for complete vehicles. They can be imported from China and can also be produced locally.
Guo Zheng said that most of the overseas factories of Chinese car companies use KD method to assemble, because the KD method not only helps reduce the company's procurement costs, but also benefits the country where the factory is built. She also believes that Chinese truck companies have already gone through the rising period of industrial output, and will also focus on improving the capabilities and level of financial services in the future, so as to realize the goal of export strategic transformation with respect to product output, industrial output, and capital output.
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