the made in china phenomena
TRANSCRIPT
THE MADE IN CHINA PHENOMENON
GROUP 1
Mark Lombardi
Serena Raymon
Llewellyn Tsang
Marcela Flores
Daniela Arriagada
China’s Automotive Industry
1
• Population: 1.3 Billion
• GDP: USM$4,446,852.6 (2008: 10.1%)
• Reserve of US-Gold: 2.0 trillion
• FDI: US$758 billion (2007)
• Industrial Growth Rate:
2007 (22.90%) 2008 (12.9%)
• Import: USM$1,134,098.0
• Export: USM$1,332,688.5
Bullish, Bullish Bullish(A wish in Year of OX)
An Economic Superpower
2MGSM985U Doing Business in/with China
An attractive market and low cost supply base
An Attractive Destination
Low cost – Sustainable ?
3
Current Affairs
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Economic Initiatives – Car Industry
• Stimulus package of Rmb4,000bn(US$585bn) to avert economiccrisis.
• Halve to 5% the sales tax on purchases of cars with engines under1.6 lts capacity.
• Give a one-off cash subsidies of Rmb5bn to owners of highemission vehicles who trade them for cleaner ones.
• Establishment of a Rmb10bn fund to promote new technologyvehicles.
• The State Council would not allow new steel capacity expansionprojects.
• Encourage consolidation in the crowded auto industry.
5MGSM985U Doing Business in/with China
Car Industry Facts – Did you know …
• 3rd largest producer after Japan and USA.
• 4,355,021 cars produced in 2008
• Over 100 manufacturers.
• JV with key global players.
• Assembly plants in emerging markets.
• 30 cars per 1,000 Chinese. World avg 120 per1,000.
• 10% of Chinese cars must run on alternativefuels by 2010.
A land of contrast:
27 million cars and 0.8billion Bicycles.
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Great Wall Motor Company Ltd长城汽车 or 長城汽車
• The majority of the above Chinese companies have formedstrategic alliances with major global auto manufacturers.
A Crowded Auto Industry
Some of the main Chinese branded car companies
• SAIC/Volkswagen joint venture is today China’s largest carmanufacturer.
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Key Strategic Alliances – Major brands Represented
• The “Made in China” Brand as a Challenge.
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Challenges – Brand Name
• Perception of poor quality, low safety andcheap.
• Quality Scandals and over coverage byWestern media
• History Lessons: The Japanese and Koreanexperience
• Governments key Role in protectingbrand image
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Challenges – Safety
Are Chinese cars safe ?
Great Wall car – Model name “SAFE”
• Chinese learn fast from poor EU crash test results.
• Safety issues resolved
• Working on brand image, eg. Great Wall Car – Model name “SAFE” launched in Chile.
Drivers for Green Cars• Kyoto Protocol• The pollution from car increase as no. of cars increases• China’s own target to cut fossil fuel consumption by 40%
Current Market• 17 brands in existing market and 20+ new brands in next 2 – 3 years• World First EV in production – F3DM from BYD
Opportunities• Domestic Market• International Market for cheap and domestic transportation.
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Industry Opportunities
To be Green…
• Strong seller - Pictured Chery QQ –N1 Compact car sales in 2008 (China Association of Automobile Manufacturers) .
• Largest Independent car maker (State-Owned) founded in 1997.
• Top Chinese passenger-car exporter for five consecutive years. In 2007, it sold 119,000 units abroad, accounting for 30% of that year´s total sales.
• Today in 70 countries and have 7 foreign assembly plants: Egypt, Indonesia, Malaysia, Iran, Russia, Ukraine and Uruguay.
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Chery Motors – A Success Story
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Chery founded as car parts
supplier
1997
• First car produced• “Feng Yun”
1999 2001
• First exportto Syria
• Chery QQ Launched
2005
• Chery Tiggo launched
2006
• Engines exported tothe US
2007
• Launched in Chile• MOU Signed with FIAT• Plant set up in Uruguay
2008
• Launched in Argentina, Peru, Ecuador, Colombia and Venezuela
2009
• Targeting entry in Australia.
Chery Motors – A Success Story in Developing Markets
A Latin American Focus
2003
Successes• Technical cooperation with overseas companies• Car exports• Overseas assembly plants
Challenges• Accelerated the pace of its globalization:
Quantum• Quality, in the whole concept • Environmental issues
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Chery Motors – Successes & Challenges
Chery Tiggo
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First Negotiation with Chinese Partner
1978
• SVW Established• Santana B2 in production
1984 Oct 1995
• AccreditedISO 9001
1997Dec
• Accredited ISO 14001
1999
• Passat SVW in production
2002
• POLO in production
2004
• Mar - Santana 3000 in production• Nov – Touran SVW in production
2005
• Offical partner for 2008 Beijing Olympic
• Oct – TechCare established• Nov - Passat LingYu in production
2006
• SVM – “Most Influential JV in China”• POLO Jinging & Jingu in production• NEEZA concept car developed• Set up Skoda dealer network
2007
• July – VW AG & SVW development on B-Platform
Next page
A Strategic Alliance –Shanghai Volkswagen (SVW)
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• 20 Years strong alliance brings Chinese Automotive Industry to the front tier of car innovation in 21st
Century
2008
• Top passenger car seller
Last page
2009
• Retain dual brand to boost domestic sale
2010
• Passat LingYu with hydrogen cells in production
A Strategic Alliance –Shanghai Volkswagen (SVW)
Leap Forward for Chinese Car Industry
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• Beijing have policies for EV is ready• Monetary policies will be ready• Infrastructure is ready• Low cost structure from companies is ready• Domestic market is supportive and ready• Energy reduction target is here and ready• The competitors are, unfortunately, not ready• The economy is at downturn and ready (for entry)
Invented-in ChinaThe vision from President Hu Jintao
11/1/09, Salon.com
• Central Government continues revising policies• Stimulate Package of US$4 trillion• 5S standard facilities are in operational• Access to experts and professional• More understanding about their competitors• Strong Domestic MarketMade-in China
From 1978 - 2003
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謝
Q&A Session – 謝謝