Great Wall, China’s top SUV maker, to drive into foreign markets amid slump at home
- ‘Cannot be constrained to the domestic market’, says chairman
- Company aims to export 60,000 vehicles this year, a third more than 2018
Great Wall Motors, China’s top seller of sport-utility vehicles and pickup trucks, is betting on expansion in overseas markets to counter a slowdown in the domestic car market, Wei Jianjun, its chairman, said on Monday.
The company, which exports cars to countries such as South Africa, Chile and Russia, aims to export 60,000 units this year, a third more than last year’s actual exports of 45,129 units, Wei said in an interview.
“The downward trend in China’s car market is not something that can be resolved in a year or two,” he said. “We cannot be constrained to the domestic market.”
The company posted a 3.6 per cent increase in net profit for 2018 to 5.2 billion yuan (US$775 million) on Friday, lower than a consensus forecast of 5.3 billion yuan by analysts polled by Bloomberg. Shares in the company were down by 2.8 per cent in Hong Kong on Monday afternoon.
Wei, once the wealthiest automobiles tycoon in China, before being surpassed by Li Shufu of Geely Automobile in 2017, said the industry will face more consolidation and competition on quality, as China’s domestic market is unlikely to grow in size.
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Passenger car sales contracted in mainland China last year for the first time in two decades, and the slump is showing no signs of slowing down. Latest data indicates February sales plunged by 14 per cent, making it the eighth consecutive month of decline.
China’s economy, growing at its slowest pace in about 30 years amid a trade war with the US, is also pushing domestic carmakers to seek opportunities abroad.
China’s car exports climbed by 17 per cent year-on-year in 2018 to 1.04 million units, according to industry group China Association of Automobile Manufacturers, even though carmakers have yet to crack the market in the United States, the world’s second-largest after mainland China.
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State-owned Chery Automobile was the top exporter, with more than 126,000 units last year, according to the China Passenger Car Association, while Great Wall ranked sixth.
Exports accounted for 5 per cent of Great Wall’s overall sales last year, and it is looking to add more overseas bases for marketing, production and assembly, according to Wei.
The company is building a plant in Russia’s Tula state – where it will produce key models of its popular SUV brand Haval in the second quarter – with an estimated annual capacity of 150,000 vehicles.
But he said he believed China’s cars will become popular in the world, just like its smartphones and home appliances.
It’s an “unstoppable trend”, for China to transform from a major importer to an exporter in these industries, he said.
