Untitled - China Europe International Business School

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Organization of the logistic chain in the Chinese international trade Domestic-made passenger car sales by manufacturer (first half of 2006) Manufacturers First half 2006 Share Volkswagen 281.813 13.9 % General Motors 223.110 11.1 % Hyundai/Kia 199.380 9.9 % Chery Auto 144.271 7.1 % Honda 143.509 7.1 % Toyota 112.553 5.6 % FAW Xiali 106.947 5.2 % Geely Auto 105.823 5.2 % Nissan 102.318 5.1 % PSA 100.173 5.0 % Suzuki 85.849 4.3 % Ford 58.398 2.9 % Mazda 56.570 2.8 % Hafei Motor 35.720 1.8 % Mitsubishi Motors 35.707 1.8 % Audi 33.547 1.7 % Brillance Jinbel 26.385 1.3 % Others 168.049 8.3 % Total 2.018.679 100.0% Source: www.Fourin.com. China Automobile Weekly statistics. August 2006 Domestic-made passenger car sales by origin of the maker (first half of 2006) US, 13.9% European, 22.2% Korean, 9.9% Japanese, 26.6% Chinese, 27.4% Source: www.Fourin.com. China Automobile Weekly statistics. August 2006 CEIBS Port of Barcelona Chair of Logistics 39
Organization of the logistic chain in the Chinese international trade Overseas markets Chinese manufacturers are using foreign partners to build overseas sales networks. Some examples are: � Chery Automobile has partnered with Visionary Vehicles in the US, aiming to sell 1 million units of passengers’ cars in 2010, starting in 2007. � Jiangling Motors set up an agreement with the import company Sino Motors, to start selling in Spain around 1.500 units. The Chinese automaker Great Wall is planning to develop a sales network around Europe. � Jiangling Motors also signed an agreement with Peter Bijvelds (Netherlands, Automobile Sales) to sell two thousand units the first year. � Zhongxing Automobile signed a sales cooperation agreement with ZXNA, which is a subsidiary of CHAMCO (China America Cooperative, Inc.) to sell 40 thousand units by 2007. (Products to be sold are the Landmark (SUV) and Grand Tiger (pickup)) Foreign plants are planed for the near future or being built overseas by Chinese manufacturers to conduct assembly of Chinese automobiles. Some examples are: � Chery Automobile has established assembly plants and began a small-scale assembly of the QQ model and other 3-4 passengers’ cars. Some of the partners are SKT in Iran ( Parts Supplier), Daewoo Motors Egypt in Egypt ( Automobile Assembly), Avtotor in Russia. � Nanjing Automobile and Oklahoma Sovereign Development LLC (US, Investment Group) have set up a JV in the US for the construction of a plant early in 2007. Operations are scheduled to start at the end of 2008 for the production of passengers cars. In the vehicles segment, Chinese companies with major plans to export are the producers without major joint-venture tie-ups with large international producers. Although vehicle manufacturers in China still focus on the domestic market, it is likely that they will start to export as quality and efficiency improves. The industry reports agree that a competitive Chinese Automotive Industry will be ready in 5 to 10 years. And Chinese vehicle exports will in several years arrive to European and US market. Automotive parts Industry To remain competitive, carmakers need to reduce their components costs. The components industry has traditionally been a local one, but the situation has changed considerably over the last decade and will see even more changes in the next years. There has been increasing investments from European and North American parts manufacturers in Asia, and China especially. Chinese automotive parts exports have been growing fast and are already important with the U.S.. For the US market, many of these exports are aimed at the aftermarket as main products are wheels, brake parts and electronics. The component industry in Asia will develop considerably in the next years. As Asian local components manufacturers improve and progressively meet multinational vehicle manufacturers’ requirements they will not only serve the sector within Asia but will become a source of components for the rest of the world. CEIBS Port of Barcelona Chair of Logistics 40
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