Commercial vehicle exports to South America are full of opportunities and challenges


Like the booming and full of opportunities in the Chinese market, South America as another emerging market has also attracted the attention of global investors. Two years ago, the domestic commercial vehicle market was booming, and overseas markets with little share were almost ignored. However, with the delisting of favorable policies and the global economic recession, the domestic commercial vehicle market has also entered a downward track. Thus, while waiting for the slow recovery of the domestic market, various commercial vehicle manufacturers are also making great efforts to actively develop and cultivate overseas markets.


A considerable increase in exports


“This year, China's overseas exports of commercial vehicles are good. From the perspective of several major export regions, the growth of the South American market is faster than in other regions. Among them, Brazil, Venezuela, Chile, and Peru are the major markets.” Vice-chairman of the China Association of Mechanical and Electrical Products Import and Export Chamber of Commerce Secretary-General Yang Aiguo told reporters.


According to customs statistics, as of October, trucks exported to South America accounted for a total of 14,154 diesel trucks less than or equal to 5 tons, an increase of 21.22% year-on-year, and an increase of 24.05% in export value; 13,769 diesel trucks exported from 5 to 14 tons, The year-on-year decrease was 8.07%, the export volume increased by 10.02% year-on-year; the number of 14-20 tons diesel trucks exported was 1,087 units, a year-on-year decrease of 3.12%, and the export volume increased by 9.4% year-on-year; the export of diesel trucks of more than 20 tons was 1,760 units, an increase of 9.59% year-on-year. The export volume increased by 13.93% year-on-year; the number of road tractors used for semi-trailer vehicles was 2,087, an increase of 4.72% year-on-year, and the export volume increased by 22.98% year-on-year.


In terms of passenger car exports to South America, 4 to 19 passenger cars exported 4542, an increase of 64.15%, and the export value increased by 78.09% year-on-year; 20 to 29 passenger car exports were 1,087 units, a year-on-year decrease of 15.78%, and the export value increased by 23.67% year-on-year; 30 The number of passenger cars and above were 1,486 vehicles, an increase of 66.41% year-on-year, and the export volume increased by 116.36% year-on-year.


“As the economic development of South American countries continues, the demands of users on vehicles have also been constantly upgraded. At the beginning, the vehicles exported to South America were mainly economic type, and they are now moving towards the mid-to-high end. From this, we can see that although the number of individual exports Compared with the same period of last year, it was declining, but the export volume still maintained an increase." Analysis of the industry said.


It is understood that South America is one of the regions where China’s commercial vehicle exports entered earlier. Although it is geographically distant from China, the development speed and degree of some countries in the region are similar to those of China, which determines the demand for vehicles in the market and our country. There is some similarity. In addition, in the 1980s, South America basically belonged to the undeveloped area of ​​the international auto market, and the fierce competition in the market was relatively low. This can be tried for Chinese auto companies that have just developed into overseas markets and have just developed. . As a result, Chinese commercial vehicle manufacturers such as FAW, NAC and BAIC have successively exported their liberated, Yuejin, and Beijing light and medium-sized trucks to a few countries in South America (such as Chile, Bolivia, Venezuela and Mexico). At that time, the auto industry of South American countries had not yet formed. The Japanese market was mainly dominated by Japanese cars. Commercial vehicles in China were able to enter the market because of the advantages of quality close to international standards and affordable prices.


Brazil: The biggest market is hardest


“As the largest country in South America, Brazil’s economy is relatively developed, and its automotive industry is also relatively developed. It is the largest automotive market in South America, and therefore it has become the center of the automobile industry in the region, and a multinational production and assembly plant from developed countries in the automotive industry. Therefore, relatively speaking, the competition for exports to Brazil is even fiercer.” The industry analysts said: “Since the 1990s, Japan’s Honda, Mitsubishi, Toyota, Nissan, Germany’s Mercedes, Man, and France’s Citroen , Peugeot, Renault, South Korea's Hyundai, Italy's Iveco, Sweden's Volvo, Scania and other famous brands have established their own assembly plant in Brazil.


In short, all automobile companies in the world have adopted Brazil, which has a relatively developed economy, as a bridgehead into South America and regards the region as a market with potential for future growth. "Brazil has surpassed Germany as the world's fourth-largest automotive market in 2010, while South America is the world's fourth largest intercontinental vehicle market after North America, Asia and Europe, and its growth rate is faster than any of the above markets. Therefore, Brazil has become the first target for all multinational commercial vehicle companies to enter the entire South American region,” the industry source added.


"The export to Brazil is not only a competition with international car companies, but also some boycott policies that the Brazilian government has adopted to protect and promote the development of its own automobile industry," said industry veterans. For example, he said that a policy introduced in Brazil last year requires that cars sold in the local market must have a production rate of more than 65% in the country of their parts. For imported cars that do not meet the localization targets, the average tax rate for industrial products tax (IPI) that should be paid is up to 37%~55%. This policy has increased the price of imported cars in the Brazilian market by 25% to 28%. This is undoubtedly a heavy blow to the export vehicle manufacturers.


Not long ago, the Brazilian Minister of Finance announced that in order to revitalize the auto industry on the edge of the recession, the Brazilian government decided to implement temporary measures to reduce taxes and facilitate loans. The new measure stipulates that all cars that meet Brazil's localization standards (ie, invest in factories in the country and have a localization rate of more than 65%) will be exempted from the 7% industrial product tax; for all production substandard cars, The tax rate has been reduced from 34% to 31%.


“This policy is good news for companies that have factories in Brazil, but the risk of companies setting up factories overseas is greater than domestic ones, especially for Chinese commercial vehicle companies that are in the long-term transition period. Those who are still underpowered are not yet able to In Brazil, where companies build factories but products are exported to the region, future business development will become increasingly difficult.” An analysis of the above-mentioned industry veterans.


The secondary market has


“In the past two years, China’s commercial vehicle companies have done a good job in exports to Chile, Venezuela and Peru. Since long ago, China has signed free trade agreements with Chile and Peru, and our own brand exports to these two countries can enjoy Zero-tariff policy. Without a boycott policy, the export of enterprises will be a lot smoother,” said an overseas market department official at a car company.


Recently, the Yutong Bus International Marketing Media Forum sent a message that Yutong Bus and Venezuela signed a purchase order for 1,216 vehicles. This is the largest single-passenger bus order in Venezuela’s history, involving the 18-meter natural gas articulated vehicle ZK6180HGC, the 11-meter natural gas bus ZK6118HGA and the 9-meter diesel bus ZK6896HG, and equipped with intelligent public transportation systems and personnel training and technology transfer. The total amount is close to 1.49 billion yuan. This order is not only the biggest export to China's bus industry to Venezuela, but also the largest single export of natural gas buses in the industry, laying the foundation for the government's effective use of clean energy. In addition, the project also promoted the establishment of the first BRT bus operation system in Venezuela.


"While Venezuela, Peru and other countries are not as economically powerful as Brazil, they are all developing countries and need more investment in public transport and infrastructure construction. This gives China's commercial vehicles a very good export opportunity." The person said.


According to the data, in 2011, Peru’s imported auto parts totaled US$1.1 billion (approximately RMB 6.8 billion), of which approximately 40% came from China. The imported products were mainly light and heavy-duty tires. In 2011, imports totaled 370 million yuan. USD (approximately RMB 2.3 billion). Del Aarno, chairman of the Peruvian Automobile Association (AAP), said earlier that in 2012, Peru's auto parts imports will increase by 20% to 1.32 billion U.S. dollars (about 8.21 billion yuan), to meet the country's motor vehicle inventory ( 2 million vehicles).


According to reports, Chile is a relatively developed country in South America, but most of the trucks seen in its industrial areas are Japanese cars such as Isuzu, Mitsubishi and Hino, which account for approximately 70% of the total. As a result, they also become Chinese commercial vehicle makers. Enter the main competitors facing the Chilean market. Compared with the price/performance ratio, due to long-distance shipping of the entire vehicle, the price advantage of China's commercial vehicles is not obvious. This is because Japanese cars are mostly assembled in Brazil and their freight rates are relatively low. Therefore, in terms of the total cost, Chinese exports to local vehicles are only around US$2,000 (about RMB 12,000) cheaper than Japanese cars.


Industry experts believe that at present, in addition to responding to different national policy issues in the South American market, the main problem for China's auto companies is that after-sales support services need to be vigorously followed up. Even if an assembly plant cannot be established, a maintenance team must be assigned to give it. The continuous service of the local customers will enable long-term development.



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