Joint ventures between Chinese OEMs and leading global OEMs improve cost efficiencies and lower entry barriers

Singapore, 27 February 2019 – The Chinese Government’s Belt and Road Initiative, which resulted in the Railway Express that links the country, has thrown open huge global export trade opportunities. Passenger vehicle (PV) manufacturers are looking to expand beyond Asia and make deeper inroads into the Americas and European markets, especially with the production of electric vehicles (EVs). They will also target high-value PV markets in West AsiaSouth Asia, and South America, as the majority of the countries in these regions do have automotive production capability.

159429090 (1).jpg“The most preferred Chinese PVs in export countries are SUVs due to their higher cost-performance ratio and perceived value,” said Lily ZhouResearch AnalystMobility.

Chinese PV original equipment manufacturers (OEMs) are also expected to strengthen their joint venture relationships with key international leading OEMs to expand their portfolios of advanced technologies,” she explained.

SAICCheryJACDongfengGreat Wall, and Chang’an together controlled 67.3 percent of export market in 2017. Going forward, SAIC is likely to enhance its export market attractiveness through joint ventures to gain brand production benefits. Similarly, Chery’s focus on the European market, and the joint venture between JAC and Volkswagen are likely to increase their competitiveness.

Frost & Sullivan’s recent analysis, Chinese Passenger Vehicle OEMs’ Global Expansion Strategies, Forecast to 2025, examines the export strategies of key Chinese PV OEMs and analyzes the evolution of the Chinese PV export market and its changing competitive landscape. It discusses Chinese PV OEM global dynamics, and provides a PV OEM comparative analysis, overview of success factors, forecasts and trends, and growth opportunities. Lastly, it presents conclusions and a future outlook.

For further information on this analysis, please visit: http://frost.ly/38a

“Value for money is another important competitive factor to break into export regions; however, the appreciation of Chinese Yuan has lowered the price advantage of Chinese PV exports to some extent,” noted Zhou.

“Still, Chinese OEMs can adopt alternate business practices to retain this advantage; for instance, production localization in the export countries can help achieve higher cost competitiveness,” she added.

In addition to M&A and product development, successful OEMs have to make the most of the growth opportunities offered by:

  • Integrating China’s domestic and international export stakeholders, as collaborations could lead to PV demand.
  • Strategizing for profit generation from the assembly and the distribution sectors as they influence overall export activity profit margins.
  • Focusing on developing EV powertrains for the North American and European markets. These markets demand timely emission standard upgrades. EVs with attractive pricing will have a long-term competitive advantage in these regions.
  • Enhancing safety and technology features.

Chinese Passenger Vehicle OEMs’ Global Expansion Strategies, Forecast to 2025 is part of Frost & Sullivan’s global Automotive & Transportation Growth Partnership Service program.

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Chinese Passenger Vehicle OEMs’ Global Expansion Strategies, Forecast to 2025
PA0C-18

Contact:
Melissa Tan
Corporate Communications – Asia Pacific
P: +65 6890 0926
F: +65 6890 0999
E: melissa.tan@frost.com

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Tags: #FrostandSullivan, #PassengerVehicle, #China, #OEM, #PV. #EV, #JV

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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