CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

Automobile JVs look to emerging markets

01-11-2012 14:40 BJT

By Li Fangfang (China Daily)

BEIJING - International automakers with production joint ventures in China are increasingly using their bases in the country to export models to emerging markets, challenging domestic players who are keen to expand in overseas markets.

Moreover, as luxury players build special models for Chinese consumers, such as long-wheelbase versions only built in China, these models will find buyers in markets in the Middle East, where there is demand for larger, longer models, which are often seen as status symbols.

That's according to Boni Sa, a production analyst of the industry researcher, IHS Automotive Inc.

In December, the German automaker Daimler AG began exporting its Mercedes-Benz long-wheelbase E-Class sedans to South America.

The model, specially tailored for the growing premium car market in China, is exclusively produced at Beijing Benz Automotive Co Ltd (BBAC), Daimler's 50-50 joint venture with its Chinese partner BAIC Group.

"The export of our long-wheelbase E-Class from China marks a significant step in the development of the China premium auto industry, and demonstrates that BBAC produces cars with the world-renowned Mercedes-Benz quality," said Ulrich Walker, chairman and CEO of Daimler Northeast Asia.

"Following this first export batch, we will look into further opportunities for our special version of the E-Class in carefully selected overseas markets."

Daimler has realized that the extra 14 centimeters of legroom in the rear of the five-seater vehicle is appreciated not only in China, but is also winning the favor of customers in overseas markets.

In November, another German automaker Bayerische Motoren Werke AG (BMW) announced it will begin exporting its Chinese-made long-wheelbase BMW 5-Series vehicle next year.

Christoph Stark, president and CEO of BMW Group Region China, said that the move will be used as a trial in the initial stages and that shipments will be on a small scale at the outset.

"We will find some markets, maybe in the Middle East, somewhere in Asia, or some other markets that welcome the products where we can test it", said Stark. "The main market, of course, is here in China, because we can't even supply enough here."

However, BMW is adding a new plant in China, which will begin production in the early part of this year, so capacity shortages will not be an issue.

"International automakers are now paying more attention to emerging markets and using existing production bases in China, which is cheaper than exporting from Europe or North America," said Namrita Chow, senior analyst with IHS Automotive.

"Our data show that the number of international automakers exporting from China will rise in the next few years. As new plants begin production and automakers are able to meet the demand within China, many manufacturers will increase the number of vehicles they export," said Chow.

However, "this will harm local Chinese automakers' attempts to increase exports to emerging markets to counter increasing competition from international brands and combat falling sales at home", she added.

As one of the early birds in joint-venture production,the US auto conglomerate General Motors Co (GM) saw exports from China soar in 2011, after it posted year-on-year growth of 124.88 percent in October with monthly sales of 4,122 units.

In the first 10 months last year, GM exported 25,236 vehicles from China, accounting for around 7 percent of total vehicle exports from the country.

GM has been exporting its New Sail car, produced by its local joint venture with SAIC Group, Shanghai GM, to Egypt and will begin the export of vans to India, provided by its tripartite venture SAIC-GM-Wuling Automobile Co Ltd (SGMW).

It will also start to assemble "knocked-down" kits (cars in component form that are assembled in the relevant market) of Chevrolet models made by SGMW in Egypt soon.

"The introduction will help SAIC-GM-Wuling expand its market in Egypt and also seek more opportunities to cover the market in North Africa and the Greater Arab Free Trade Area," said Shen Yang, president of SGMW. "It will also help SGMW increase its export volume and further increase the competitiveness of sales and products."

In June last year, PSA Peugeot-Citroen began exporting its 408 model to Egypt. The automaker had exported 1,320 units, as of the end of October. The company had also exported 1,283 units of its 207 model by late 2011, according to statistics from IHS Automotive.

Other automakers expected to join the export trend include Hyundai Motor Corp, Nissan Motor Corp, Mazda Motor Corp, Suzuki Motor Corp and Volkswagen AG, according to IHS Automotive.

"Countries such as Egypt and other emerging markets offer the biggest growth potential for exports from China," said Chow. "International automakers are now looking to these markets to add to sales within China."

Editor:Wang Chuhan |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program