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Home > News > Automotive

Chinese automakers to step up overseas expansion with localization model

Source：Adsale Plastics Network Date ：2023-11-03 Editor ：VC, RC
Copyright： This article was originally written/edited by Adsale Plastics Network (AdsaleCPRJ.com), republishing and excerpting are not allowed without permission. For any copyright infringement, we will pursue legal liability in accordance with the law.

The 12th CPRJ Plastics in Automotive Conference & Showcase continued today (November 3). A hot topic salon was specially organized to discuss the current situation of the Chinese automotive industry and the trends of Chinese automakers going overseas.   

 

According to Taiying Wang, Secretary General of Shanghai New Energy Industry Innovation Service Platform, China's automobile exports was around 1 million units before 2021; the exports significantly increased to 2.19 million and 3.2 million units in 2021 and 2022 respectively, surpassing Germany to become the second largest automobile exporter; in the first nine months of 2023, the exports reached 3.71 million units, representing a year-on-year increase of 64.4%.

 

Technology market analyst firm Canalys forecasts that in 2023, China's automobile exports will reach 5.4 million units of which new energy vehicles (NEVs) will account for 40%.

 

“This is mainly because the automotive supply chains in Europe and the United States were basically shut down during the pandemic in 2020, and China's automotive industry seized this opportunity,” Wang said at the salon.

 

“At the same time, considering the needs of energy security and sustainable development, many countries have strongly supported the development of new energy vehicles,” he added.


Salon on second day_1_480.jpg

Experts discussed the development of China' automotive industry at the topic salon. 

Chinese automobile export model to undergo changes


The average export price of Chinese automobiles has increased from US$13,000 in 2019 to US$20,000 in 2023 (all models). In particular, the average export price of NEVs has increased from US$5,000 in 2019 to US$24,000 in 2023.

 

The penetration rate of NEVs in export models has also increased from 13% in 2018 to 34% in 2023.

 

However, unlike the exports of consumer goods such as clothing and footwear, it is difficult for the exports of automobiles to grow sustainably.


“Currently, exports are expected to reach more than 5 million units this year, I think the limit is 6 million units basically,” explained Wang.


Wang_480.jpg

Taiying Wang, Secretary General of Shanghai New Energy Industry Innovation Service Platform.

 

He believes that the model of Chinese carmakers going overseas will undergo fundamental changes in the future, from a trade-based model to a localization model as well as from quantitative change to qualitative change. In addition, Chinese manufacturers have to continue internationalization, which will also reshape the supply chain.

 

Specifically, the localization model refers to setting up production facilities in overseas, or to manufacturing parts in China and assembling in overseas. Some Chinese carmakers have already implemented overseas expansion strategies, including Great Wall Motor, Changan Automobile, and BYD.

 

It is possible to increase the number of vehicles manufactured by Chinese carmakers in overseas from the current 1 million units to 10 million units, remarked Wang.

 

Southeast Asia: The next battlefield 


Wang expects Southeast Asia will be the next battlefield for NEVs. In addition to the huge population, Southeast Asian countries actively promoting carbon emission reductions will accelerate the development of NEVs, he said.

 

Thailand, Malaysia, and Indonesia are the top three automobile markets in the region, with total output accounting for more than 90%. According to Wang, Thailand has the strongest automotive industry, Malaysia has strong independence in parts supply, and Malaysia has rich mineral resources.

 

Nevertheless, the Southeast Asian NEV market still faces challenges such as policy guidance, insufficient infrastructure, and competition among global carmakers, he concluded.


Visiting SAIC Volkswagen plant in Anting


This year's plant tour for the conference was to visit SAIC Volkswagen’s Anting No.2 Auto Plant in Shanghai.


plant tour_visitors_480.jpg

A plant tour to SAIC Volkswagen’s Anting No.2 Auto Plant.

 

With a total investment of RMB 4.75 billion and 5-year construction, the 350,000-square-meter plant covers facilities that assist production, including body, paint, assembly, prototype and stamping shop, and a comprehensive office building.

 

It went into operation in 2018 and currently manufactures the new Lavida series. The plant has become the first standardized production site of SAIC Volkswagen in Anting area


plant tour_display center_480.jpg

The display center in Anting No.2 Auto Plant.

 

The plant’s assembling shop has now reached a productivity of 60JPH, which means a whole vehicle per minute. The shop utilizes robot for completing highly cooperative work, achieving an annual productivity of 300,000 vehicles.


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Source：Adsale Plastics Network Date ：2023-11-03 Editor ：VC, RC
Copyright： This article was originally written/edited by Adsale Plastics Network (AdsaleCPRJ.com), republishing and excerpting are not allowed without permission. For any copyright infringement, we will pursue legal liability in accordance with the law.

The 12th CPRJ Plastics in Automotive Conference & Showcase continued today (November 3). A hot topic salon was specially organized to discuss the current situation of the Chinese automotive industry and the trends of Chinese automakers going overseas.   

 

According to Taiying Wang, Secretary General of Shanghai New Energy Industry Innovation Service Platform, China's automobile exports was around 1 million units before 2021; the exports significantly increased to 2.19 million and 3.2 million units in 2021 and 2022 respectively, surpassing Germany to become the second largest automobile exporter; in the first nine months of 2023, the exports reached 3.71 million units, representing a year-on-year increase of 64.4%.

 

Technology market analyst firm Canalys forecasts that in 2023, China's automobile exports will reach 5.4 million units of which new energy vehicles (NEVs) will account for 40%.

 

“This is mainly because the automotive supply chains in Europe and the United States were basically shut down during the pandemic in 2020, and China's automotive industry seized this opportunity,” Wang said at the salon.

 

“At the same time, considering the needs of energy security and sustainable development, many countries have strongly supported the development of new energy vehicles,” he added.


Salon on second day_1_480.jpg

Experts discussed the development of China' automotive industry at the topic salon. 

Chinese automobile export model to undergo changes


The average export price of Chinese automobiles has increased from US$13,000 in 2019 to US$20,000 in 2023 (all models). In particular, the average export price of NEVs has increased from US$5,000 in 2019 to US$24,000 in 2023.

 

The penetration rate of NEVs in export models has also increased from 13% in 2018 to 34% in 2023.

 

However, unlike the exports of consumer goods such as clothing and footwear, it is difficult for the exports of automobiles to grow sustainably.


“Currently, exports are expected to reach more than 5 million units this year, I think the limit is 6 million units basically,” explained Wang.


Wang_480.jpg

Taiying Wang, Secretary General of Shanghai New Energy Industry Innovation Service Platform.

 

He believes that the model of Chinese carmakers going overseas will undergo fundamental changes in the future, from a trade-based model to a localization model as well as from quantitative change to qualitative change. In addition, Chinese manufacturers have to continue internationalization, which will also reshape the supply chain.

 

Specifically, the localization model refers to setting up production facilities in overseas, or to manufacturing parts in China and assembling in overseas. Some Chinese carmakers have already implemented overseas expansion strategies, including Great Wall Motor, Changan Automobile, and BYD.

 

It is possible to increase the number of vehicles manufactured by Chinese carmakers in overseas from the current 1 million units to 10 million units, remarked Wang.

 

Southeast Asia: The next battlefield 


Wang expects Southeast Asia will be the next battlefield for NEVs. In addition to the huge population, Southeast Asian countries actively promoting carbon emission reductions will accelerate the development of NEVs, he said.

 

Thailand, Malaysia, and Indonesia are the top three automobile markets in the region, with total output accounting for more than 90%. According to Wang, Thailand has the strongest automotive industry, Malaysia has strong independence in parts supply, and Malaysia has rich mineral resources.

 

Nevertheless, the Southeast Asian NEV market still faces challenges such as policy guidance, insufficient infrastructure, and competition among global carmakers, he concluded.


Visiting SAIC Volkswagen plant in Anting


This year's plant tour for the conference was to visit SAIC Volkswagen’s Anting No.2 Auto Plant in Shanghai.


plant tour_visitors_480.jpg

A plant tour to SAIC Volkswagen’s Anting No.2 Auto Plant.

 

With a total investment of RMB 4.75 billion and 5-year construction, the 350,000-square-meter plant covers facilities that assist production, including body, paint, assembly, prototype and stamping shop, and a comprehensive office building.

 

It went into operation in 2018 and currently manufactures the new Lavida series. The plant has become the first standardized production site of SAIC Volkswagen in Anting area


plant tour_display center_480.jpg

The display center in Anting No.2 Auto Plant.

 

The plant’s assembling shop has now reached a productivity of 60JPH, which means a whole vehicle per minute. The shop utilizes robot for completing highly cooperative work, achieving an annual productivity of 300,000 vehicles.


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Chinese automakers to step up overseas expansion with localization model

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