Cost and manufacturing advantages allow China to become a multinational vehicle export base

In addition to becoming a globally important market for multinational car companies, China is gradually becoming an export base for these brands. A few days ago, PSA (Peugeot Citroen) announced that it will export the Triumph produced in China to Russia. Before this, domestic triumph has been exported to Argentina.

The new PSA vice president and president of the Asian region, Gregory Olivier, said recently that PSA is considering exporting cars produced in China to Russia.

It is reported that PSA Peugeot Citroen hopes that as early as next year, it will export its cars produced by Shenlong Motor Co., Ltd., a joint venture with Dongfeng Motor, to other regions in Asia and Russia. Moreover, the process of exporting automobiles will gradually be opened in the future. At present, PSA Peugeot Citroen is building a logistics platform in Shanghai and it is expected that in 2011, it will start exporting automobiles to Asia in small quantities.

As part of China’s deep involvement in development, Triumph was exported to Argentina as early as 2006 and became the first joint venture brand to be exported overseas. It is reported that in the next three years, Shenlong will export 10,000 to 20,000 Triumphs to the Russian market.

China is the second largest automotive market for PSA Peugeot Citroën. On September 1st this year, PSA’s Asia headquarters in Shanghai officially started operations. The former China sales office in Beijing also moved to Shanghai. Olivier also plans to increase the number of engineers at the Shanghai R&D center from 350 to 1000 now. From management to R&D and sales, China has become increasingly important in the entire PSA Asia operating system. At the end of this year, the third plant of Shenlong Motor will officially start construction. After the production, PSA will have an annual production capacity of 400,000 vehicles in China.

In addition to Shenlong, as early as in 2005, Honda China Co., Ltd. exported JAZZ produced in China to Europe, specifically for the export of JAZZ and Guangzhou Honda production of hatchback Fit common platform and parts procurement system, the localization rate has reached 60% . It is produced by a specialized export processing base in Guangzhou and sold to overseas developed markets. Honda China is also the first Sino-foreign joint venture specialized in the production of export products in the automotive industry in China. Moreover, Honda has a spare parts factory in China dedicated to Europe. By the end of 2008, Honda China had exported more than 100,000 JAZZs to more than 20 European countries. Another joint venture company, SAIC-GM-Wuling, has become an important global export base. Its models are sold to countries in Asia and the Middle East and have become an important way for GE to develop these emerging markets.

The reporter was informed that, including commercial vehicles, many domestic joint-venture car companies have plans to export Chinese cars to other countries. Moreover, similar to its own brands, these car companies have already established overseas sales divisions.

The above-mentioned several joint-venture car companies have stated that taking China as an overseas production and export base takes into account both cost and resource advantages. On the other hand, it is because China's auto manufacturing level has reached the requirements of other global markets. For those countries and regions that have a multinational car brand sales network but do not have factories, the introduction of Chinese-made cars is a two-way choice for both manufacturers and distributors.