by Fons1 via FlickrAs their Western and Japanese competitors like GM, Ford and Toyota crumble, Chinese car companies consider going global. Shaun Rein of the China Market Research Group (CMR) interviewed top-executives and discusses possibilities and challenges for Seeking Alpha.
As recently as 2001, many companies were reluctant to begin the move. Today, Chinese brand autos are sold in 188 countries and regions worldwide, for a total of 54.38 billion RMB ($7.23 billion USD) in 2007. While overseas demand for Chinese autos has slowed dramatically in recent months due to effects of the financial crisis on key markets, both auto companies like Chery and the Chinese government will continue to prioritize expansion overseas going forward as it is considered crucial to the continued growth of the Chinese auto sector, for reasons to be described below. 10 out of 10 respondents have started moving overseas, and all consider further development abroad a high priority.
Just like other industries, China’s automotive industry focusing on developing countries, because regulations are less strict compared to developed nations.
While 2009 will be a tough year for Chinese automakers, both in exports and domestic sales, expansion overseas will remain a key long term goal. Chinese auto companies should not be too hasty in their rush to grow abroad. Rather, they should focus energy and resources now on improving their quality and safety, and building the right brand image from the start.
More at Seeking Alpha.
This is the first of a ten-part report on the global ambitions by Chinese companies. Expect more here very soon.
Shaun Rein is a leading speaker at the China Speakers Bureau. When you need him to explain what is really going on in China, do let us know.