Great Wall Mo­tor sets up plant abroad

China Daily European Weekly - - Business - By ZHANG YU [email protected]­

In the first half of next year, China’s first full-fledged over­seas au­to­mo­bile plant will be­gin op­er­a­tions in Rus­sia’s Tula re­gion.

The $500 mil­lion fa­cil­ity of Great Wall Mo­tor Co Ltd, China’s largest SUV and pickup man­u­fac­turer by sales vol­ume, is part of the au­tomaker’s plan to in­crease its global foot­print.

With head­quar­ters in Baod­ing, He­bei prov­ince, GWM is mak­ing its “big­gest move” in over­seas mar­kets “since our first ve­hi­cle went abroad two decades ago”, says Wang Shi­hui, the com­pany’s gen­eral man­ager for in­ter­na­tional mar­ket op­er­a­tions.

Wang joined GWM in 1999 as a sales­man and has been a wit­ness to its global de­vel­op­ment. Ac­cord­ing to Wang, the plant in Rus­sia will make self-de­signed cars from scratch, not just as­sem­ble them like in many knock-down plants that GWM has set up over­seas.

With an an­nual ca­pac­ity of 150,000 units, the plant will sup­ply to the Rus­sia mar­ket and ex­port some of its out­put to other Eu­ro­pean mar­kets, Wang says.

“Once the Rus­sia plant starts, our over­seas vol­ume is ex­pected to in­crease enor­mously by 2020,” he says, with­out of­fer­ing any pro­duc­tion tar­gets.

The com­pany said it ex­ported 39,168 ve­hi­cles last year, up by 125 per­cent year-onyear. This year, ex­ports are ex­pected to reach 55,000 units.

“The cur­rent ex­port vol­ume is not big com­pared with our best year in 2012, when GWM sold about 100,000 ve­hi­cles in for­eign coun­tries,” Wang says.

His im­me­di­ate chal­lenge is to fine-tune GWM’s global strat­egy, main­tain steady growth and brighten the com­pany’s brand im­age.

“We at­tach more im­por­tance to the good rep­u­ta­tion of our ve­hi­cles than just a quan­ti­ta­tive in­crease in sales,” says Wang, who has been de­vel­op­ing GWM’s in­ter­na­tional mar­ket for 15 years.

He says the com­pany learned the hard way how cru­cial it is to back up pro­duc­tion with ef­fi­cient af­ter-sales op­er­a­tions. In 2012, GWM re­al­ized that rapid growth in ex­ports caused prob­lems in af­ter-sales ser­vice and sup­ply of spare parts.

“For more than a decade, sell­ing more ve­hi­cles in more coun­tries was the key aim of our global strat­egy,” Wang says. Early suc­cess in ex­ports led to a ro­bust growth rate, which tempted the com­pany to con­cen­trate on boost­ing num­bers ini­tially, only to shift the fo­cus to qual­ity later.

Learn­ing, adapt­ing to changes and ex­ploit­ing new op­por­tu­ni­ties have been the hall­marks of GWM’s evo­lu­tion over the years. For in­stance, when the com­pany saw a mar­ket for pick­ups de­vel­op­ing, it started pro­duc­ing them in the 1990s.

In 1998, a Chi­nese con­struc­tion com­pany bought 60 GWM pick­ups to be used in in­fra­struc­ture con­struc­tion projects in Iraq.

“At first, we only ex­ported based on the or­ders that came in, still not think­ing of ex­port­ing our prod­ucts proac­tively,” Wang says.

He and his dozen-strong team man­aged to in­crease ex­ports via var­i­ous chan­nels. They found fran­chisees that helped ex­hibit ve­hi­cles in dif­fer­ent coun­tries.

Around 2010, nearly 100 coun­tries im­ported GWM ve­hi­cles. “But we started to cut the ex­port vol­ume and ve­hi­cle types in 2012 when af­ter-sales ser­vice is­sues emerged, which hurt our rep­u­ta­tion. That in­flu­enced our long-term de­vel­op­ment strate­gies,” Wang says.

“We started to fo­cus more on the qual­ity of prod­ucts and af­ter-sales ser­vice. We set up over­seas re­search cen­ters, sales branches and knock-down plants.”

He says branches and plants were es­tab­lished to guar­an­tee high-qual­ity de­vel­op­ment over­seas and were di­rectly man­aged by cor­po­rate head­quar­ters.

At present, GWM ve­hi­cles, mainly SUVs, are ex­ported to about 60 coun­tries. Ecuador, South Africa, Peru, Malaysia, Rus­sia and Aus­tralia are the key ex­port mar­kets, Wang says.

“We are pre­par­ing to ex­port our prod­ucts to the US, In­dia, Brazil and coun­tries in Europe next.”

It is not easy to sell China-made ve­hi­cles in mar­kets like the US and Europe, where the au­to­mo­bile in­dus­try is well es­tab­lished and qual­ity-con­scious con­sumers and strict reg­u­la­tions and trade tar­iffs pose great chal­lenges, he says.

“But given our achieve­ments in the do­mes­tic mar­ket, we aim to grow into the world’s SUV leader one day,” Wang says.

Ac­cord­ing to GWM, its SUV sales vol­umes have topped the do­mes­tic mar­ket charts for 15 con­sec­u­tive years since 2003.

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