Annual export of self-owned brands will accelerate overseas investment in over one million automobile industries

Although the domestic auto market continued to slump in the first half of this year, the export of self-owned brand car makers has achieved a lot.

According to the statistics of China National Automobile Industry Corporation (SAIC), the export statistics of automobile manufacturers show that in the first half of the year, China exported 489,900 vehicles, which was a year-on-year increase of 28%. In May and June, exports exceeded 100,000 vehicles.

According to forecast, China's total auto export volume is expected to exceed one million units this year, with a year-on-year growth rate of 27.48%. The export volume is expected to reach US$17.472 billion, an increase of 59.37% over the previous year.

However, from the current point of view, the country’s auto exports accounted for only 4.59% of the total production and sales volume of China’s auto vehicles and were far less than 50% of the export volume of developed countries. China's auto export structure has changed significantly, but the export model needs to shift from relying on high cost-effectiveness to the full value chain. At the second China Automotive Overseas Development Seminar held on July 31st, Wang Xia, Chairman of the Automotive Industry Branch of the China Council for the Promotion of International Trade stated.

Sales growth structure improvement China Automobile Industry Branch of the China Council for the Promotion of International Trade The 2011 China Automotive Export Development Research Report published hereafter referred to as the “Report” shows that in 2011, China’s total vehicle exports totaled 850,000 vehicles, and the export value exceeded US$10 billion for the first time. Reached US$10.96 billion, an increase of 49.99% and 56.82% respectively over the same period of last year

From the point of view of the export vehicle structure, in 2011, the exports of commercial vehicles accounted for 69.54% and the proportion of passenger cars increased to 30.46%. The passenger cars were mainly exported with 1.0L to 2.0L of passenger cars. This structural change shows that China's auto export structure has been improved to some extent. Zhao Yang, director of industry development at the Automotive Industry Branch of the China Council for the Promotion of International Trade, interpreted this.

From the perspective of market structure, Latin America has become the most important export market for Chinese auto companies. In 2011, it exported 280,000 cars to the Latin American market, an increase of 121%, of which 144,000 were exported to Brazil, an increase of 312%. Latin America, Latin America, became the largest export market for Chinese automotive products.

From the perspective of product structure, the share of passenger car exports reached 54%. Sedan became the largest export vehicle. At present, vehicle exports cover cars, passenger cars, trucks, and other models, changing the structure of a single export product consisting mainly of commercial vehicles such as trucks.

According to analysis, Chery, Great Wall, Geely and other top 10 self-owned brand companies have already accounted for 80% of the country’s auto exports. The report points out that the structure of the country’s auto exports is “non-five” Chery, Geely, Great Wall, and JAC. Lifan) mainly owns its own brand. In 2011, non-five major "exports totaled 412,600 units, accounting for 74.4% of the total export volume for the whole year accounting for 69% of the total amount of the year.

Overseas investment accelerates mergers and acquisitions to become an important form of foreign investment, mainly in resources, automotive finance, telecommunications and other fields. Chen Lin, Commercial Counselor of the Department of Foreign Investment and Economic Cooperation of the Ministry of Commerce stated at the China Automotive Overseas Development Seminar. According to him, as of the end of June this year, 530 foreign companies and institutions have been set up overseas by companies in the automotive industry approved by the Ministry of Commerce. Among them, 529 companies are involved, with an investment of 5.329 billion U.S. dollars.

The number of companies engaged in trading accounted for the majority, reaching 457; there were 37 R&D companies. Direct investment can avoid such factors as the policies formulated by the host country, trade protection, and technical barriers. Chen Lin said.

Taking Brazil as an example, the taxation policy introduced by the local government in succession has increased the price of imported cars on the Brazilian market by 25% to 28%, directly affecting the exports of local companies to the local market, including Jianghuai and Chery.

Before the policy change, 18 multinational automobile companies have already invested in Brazil, and sales of Chinese auto companies that have not invested in factories have been seriously affected. Chen Lin said.

Subsequently, in April this year, the Brazilian government announced the decision to implement temporary measures for tax relief. The New Deal stipulated that all those who meet Brazil's localization standards, that is, invest and set up factories in the country and have a localization rate of more than 65%, will be exempted from the 7% industrial product tax. This policy directly stimulated the adjustment of investment strategies for Chinese auto companies. Chery, Jianghuai, Shaanxi Automobile, and Futian have successively established plants in Brazil.

It is necessary to use the capital advantages of China to directly purchase the required technology, and at the same time achieve merger through cross-border mergers and acquisitions.

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