The story appears on

Page B3

September 18, 2017

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Autotalk Special

Brand positioning, awareness challenges remain

CHINESE car manufacturers are increasingly focusing on overseas markets in order to raise their global market share.

They are expected to increase their global presence by expanding operations and sales overseas, especially in key markets including US, Europe, Southeast Asia and Africa.

This expansion is in tandem with China’s Belt and Road initiative.

The initiative was put forward by President Xi Jinping in 2013 to boost economic link between China and regions including the Middle East, Europe, Southeast Asia, Oceania and North Africa. Domestic carmakers actively support the country’s initiative and incorporate it as part of their global strategy.

As well as backing the country’s Belt and Road initiative, there are also many other reasons for Chinese carmakers to drive overseas, including enhancing their brand image, increasing car sales, and improving vehicle quality.

“Chinese original equipment manufacturers take the view that they have a good base in the domestic market and it’s time to think of going abroad,” said Jacob George, vice president and general manager of J.D. Power Asia Pacific.

“Some car manufacturers told us that if they can go into the global markets, they can improve their quality. This will be a good test for them,” he added.

There are several options to enter global markets, including exporting vehicles, acquisitions, launching new models, setting up operation centers overseas and expanding their distribution network.

About 450,000 cars were exported in the first half of this year, up 29.8 percent year-on-year, according to data from the China Association of Automobile Manufacturers.

Chinese carmakers have already built factories in markets like Russia, Brazil and Iran. Chinese automaker Zhejiang Geely Holding Group is among one of the domestic manufacturers which focus on the global market.

“Geely has footprint in the United States, the United Kingdom, Belgium, Sweden, Belarus and other countries,” said Li Shufu, chairman of Zhejiang Geely Holding Group. “We have achieved success in the Belt and Road countries.”

Geely acquired 49.9 percent of Malaysian automaker Proton earlier this year, gaining a platform to expand its distribution network in Southeast Asia. Li Donghui, executive vice president of Geely Holding Group said, “with Proton joining the Geely Group portfolio of brands, we strengthen our global footprint and develop a beachhead in Southeast Asia.”

Geely also has a brand, LYNK & CO, which eyes the global markets. The company said LYNK & CO models will be co-developed by Geely and Volvo and are expected to be sold in the US and European markets.

Geely set up an innovation center in Gothenburg, Sweden in June this year. The center, which plans to start operation in 2020, will serve LYNK & CO’s international marketing, sales, and services, according to the company.

Geely now has four design centers in Shanghai, Gothenburg, Barcelona and California to enhance design capability and build an international design team.

Sustainable growth

Shanghai-based SAIC Motor Co said stepping up business operations overseas is an important measure to achieve sustainable growth.

The company has set up a business network in Europe, North America, South America, the Association of Southeast Asian Nations, Africa and Australia.

In the first half of this year, SAIC Motor Co’s exports of vehicles and overseas sales soared 44.4 percent, according to data released on the official website of the company.

SAIC Motor Co is also expanding its network in Thailand and Indonesia. The company set up a manufacturing base in Thailand in order to further develop its distribution network. In the first half of this year, the company’s sales of its MG brand in Thailand more than tripled year on year.

In Indonesia, SAIC-GM-Wuling’s manufacturing base started operation this year and the first model called Wuling Confero S has rolled off the production line.

Dongfeng Motor Group Co, one of the state-owned carmakers, plans to launch 40 models in more than 70 countries and regions in the next five years.

Dongfeng hopes it can further expand its sales network and after-sales service.

In five years, the company hopes the number of dealership sites will grow to 912 and after-sales service centers to expand to 971 in overseas markets. The company set an overseas sales target of 150,000 vehicles by 2020.

Dongfeng said it will continue to form global business network and distribution chain, elevate the international influence of the brand and drive Dongfeng commercial vehicles into a world-famous brand.

Chinese car manufacturers see going abroad as an opportunity but also a challenge for them.

Mei Songlin, vice president and managing director of J.D. Power China, talks about several opportunities for Chinese car manufacturers going abroad.

“Chinese carmakers can improve brand image and brand perception by competing with international brands,” Mei said. “Chinese car manufacturers have improved a lot and learned a lot. They are ready to go to the global market to compete with other international brands. Five years ago, Chinese carmakers were probably not ready, but now they are becoming more confident.”

Challenges still remain for Chinese car manufacturers to go abroad, though.

Car owners and potential car buyers may not be aware of Chinese brands when they first enter the global markets. Chinese carmkers are faced with the challenge of how to raise their brand awareness.

They also face other challenges such as brand positioning and quality improvement, which require them to think and decide their brand positioning and how to improve their vehicle quality in global markets.

Chinese carmakers need to develop a unique brand position if they want to expand their global footprint and create an important and competitive name in developed markets.

“Brand positioning is very important. The success rate will be higher if brand positioning is right. Other factors such as pricing, product portfolio, after-sales service and possibility of local production will also have an impact on the expansion in overseas markets,” said Joseph Wong, analyst for China autos and auto-part research at Nomura Holdings Inc.

It’s not that far from the day when Chinese car manufacturers drive into overseas markets, especially the US and Europe.

“Some Chinese car manufacturers have set their target year or starting year for going overseas in 2019 or 2020, especially entering the US and European markets,” said Mei.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend