Hawtai drives into overseas markets for sales growth

By Yang Feiyue (China Daily) Updated: 2014-09-29 07:07

If Hawtai can achieve this, the company can raise the utilization rate of its production capacity, which will translate into greater profitability, according to the official.

Adding to the existing annual capacity of about 500,000 vehicles at facilities in Shandong's Rongcheng and Inner Mongolia's Erdos, a new facility in Tianjin became operational on May 28. The Tianjin plant has a designed capacity of 450,000 vehicles per year.

"The launch of the Tianjin facility is aimed to satisfy the growing demand of Hawtai's overseas markets," said the official in charge of Hawtai's overseas business.

Although there are many opportunities in developing countries, analysts said trade protectionism, political fluctuation and immature market conditions would hinder the expansion of Chinese manufacturers like Hawtai.

Analysts also noted that the continuous appreciation of the renminbi has increased export costs, bringing down competitiveness in complete vehicle and auto parts exports.

"The Chinese automakers should work to upgrade quality. While keeping a foothold in the domestic market, they should build strong brands overseas," said Zhang Zhiyong, an auto industry analyst.

Hawtai's Boliger SUVs and B21 sedans have made great strides in terms of product quality and performance, thanks to heavy investments in R&D, but the company still has to find ways to survive the fierce competition in the domestic market, said Zhang.

"The biggest bottleneck for the growth of China's indigenous brands is the lack of core technology, which puts them at the mercy of foreign brands," said Zhang Hongliang, board director of Hawtai.

"Now, we can control the key links in the industrial chain, because we have mastered technologies in clean diesel engine, automatic gearbox and powertrain," said Zhang.

Zhang said he believed that Hawtai should insist on technological development and grasp current market opportunities.