For a long time, the competitiveness of automobile products has been regarded as the standard to measure an industrial power. As the two "powerhouses" of global automobile export, Japan and South Korea have achieved the prosperity and development of the automobile manufacturing industry chain in the past few decades relying on the great success of their automobile products in overseas markets. According to a report released by "Nihon Keizai Shimbun" on the 23rd, if Japanese and Korean companies competed in the global auto market in the past, Chinese companies are now increasing their weight. Especially in the field of electric vehicles, which is considered to be the largest growth industry in the future, Chinese car companies are consolidating their No. 1 position. Michiaki Tanaka, a professor at the Rikkyo University School of Business in Japan, believes that China is transforming from a "big auto consumer country" to a "powerful auto export country". Whether the Chinese auto industry, which has already "produced its internal skills" on the new energy track, can replicate or even surpass the "Japanese and Korean wonders" of the year has aroused concern from many parties.
On November 23, at the Taicang Port Wharf in Suzhou, a batch of cars was about to be sent to the European market.
Japanese experts analyze three reasons for the rise
In 2021, China's auto exports will surpass South Korea and rank third in the world. From January to October 2022, China's auto exports will reach 2.615 million vehicles, second only to the global champion Japan.
According to data provided by SAIC to the Global Times, from January to October this year, SAIC sold 772,000 vehicles in overseas markets, a year-on-year increase of 46.1%. According to data provided by BAIC Group, from January to September this year, BAIC exported more than 82,000 complete vehicles, a year-on-year increase of 30%. In terms of passenger vehicles, BAIC International's core overseas markets include countries in Southeast Asia, the Middle East, Central America, and South America. In the commercial vehicle sector, its medium and heavy trucks, pickups, new energy and other products have landed in developed and developing countries.
Joint-venture and foreign-funded brands have also handed over impressive transcripts. The relevant person in charge of Volvo China told reporters that currently five domestically produced Volvo cars, including pure electric models, are exported to the world. As of October, Tesla has exported 219,427 vehicles from the Shanghai Gigafactory to the world. The localization rate of the industrial chain of the Shanghai Gigafactory has reached more than 95%, and "Made in China" has been transported to more than ten developed countries such as Europe and Asia. market.
Masashi Chengzuka, senior manager of the Innovation and Development Strategy Center of the Japan Research Institute, recently analyzed in an article that China's auto exports in 2022 are likely to exceed 3 million vehicles. When analyzing the reasons for the rapid rise of China's auto industry, Masashi Chengzuka summarized three points: First, the Chinese government has been encouraging automakers to expand exports in recent years. In 2017, China's "Medium and Long-Term Development Plan for the Automobile Industry" clearly stated that by 2025, Chinese-made automobile brands will have global influence. Since then, various government departments have actively introduced support policies to help Chinese automakers enter overseas markets. Second, the quality of cars made in China is gradually improving. Third, the number of Chinese electric vehicles exported to Europe has increased. As Europe is accelerating electrification, sales of Chinese private auto companies such as Great Wall, Geely, Weilai, and Xiaopeng continue to increase in Europe.
Own a dominant position in the electric vehicle supply chain
"Based on the world's largest domestic demand market and already possessing basic stamina, Chinese electric vehicle manufacturers are setting their sights on overseas markets." According to a report by South Korea's "Kingmin Daily" on the 24th, the core competitiveness of Chinese electric vehicle manufacturers lies in batteries, especially the number of raw materials required for batteries. China occupies a dominant position. China's output of four major new energy battery materials and parts, including cathode materials, anode materials, electrolytes, and diaphragms, ranks first in the world.
The British "Financial Times" reported on the 22nd that according to the US "Inflation Reduction Act", from 2024, if you want to get a tax credit of up to 7,500 US dollars, electric vehicles must not contain any battery components manufactured or assembled by "foreign related entities". The current situation, however, is that U.S. automakers rely heavily on minerals processed in China. A growing number of companies and their industry groups are pushing to loosen rules on Chinese companies, with some advocating continuing to allow small amounts of Chinese-supplied ingredients to be included in products.
According to the International Energy Agency (IEA) report, 35% of the world's nickel, 50% of lithium, 60% of cobalt and 90% of rare earth elements are processed by China. In addition, 2 out of the top 3 output of the 7 cathode manufacturing companies are from China; the 6 largest anode manufacturers in the world are all Chinese companies, accounting for 2/3 of the global production capacity.
Japanese and Korean models are worth learning from
The connotation of automobile export goes far beyond the automobile itself. It will not only bring out products, brands and industrial chains, but also involve a wide range of services, management models, trade, logistics, cultural exchanges, and even national image. Masashi Chengzuka predicts that in the future, China's auto exports may exceed Japan's. With the increasing popularity of Chinese auto brands and the standardization of the functions and performance of Chinese products, companies in other countries, including Japan, are likely to use Chinese products as a benchmark.
Cui Dongshu, secretary-general of the Federation of Passenger Cars, told the Global Times reporter on the 25th that the auto industry in Japan and South Korea has risen rapidly in the past 30 years. The main experience is quality and low fuel consumption that meets consumer demand. How high the rising Chinese car companies will reach depends mainly on international political and economic relations. Whether they can enter developed countries is the key, especially entering the European and American markets.
Xu Haidong, deputy chief engineer of the China Association of Automobile Manufacturers, analyzed the Global Times reporter on the 25th, saying that when Japanese and Korean auto brands develop overseas markets, they usually first enter neighboring countries or markets that are easily accessible. Japan is the first to regard the Southeast Asian market as a strategic market, and South Korea is not as successful as Japan in the Southeast Asian market. But whether it is Japan or South Korea, they have carried out a lot of publicity for the US market, and they have grasped the energy crisis at that time, and achieved good results.
Xu Haidong said that Japanese car companies use and promote the lean production model in the globalization development, gradually forming the distinctive characteristics of Japanese cars. South Korea has also learned this model. At the same time, Japanese and Korean auto companies are all going overseas with their parts companies. The long-term direction of the global development of China's auto industry is direct investment and overseas production. With the establishment of the overseas production system, the management model, supply chain, corporate culture, and brand must be exported to complete the system construction. From the initial collection of market intelligence, research on policies and regulations, to research on local consumer preferences and traditional culture, to innovation and transformation based on local consumer needs, establishment of service systems, second-hand car recycling systems, etc., there are still many opportunities for Chinese companies. For Chinese enterprises, there are still more than ten years to go.
