Business / Auto Global

GAC plans expansion in overseas markets

By Qiu Quanlin in Guangzhou (China Daily) Updated: 2014-12-27 09:46

Vehicle producer to introduce own brands in North America, Europe

GAC Motor Co Ltd, a division of Guangzhou Automobile Group Co Ltd, will increase its global presence by exporting more of its own-brand vehicles and opening overseas manufacturing facilities, a top company executive said.

According to General Manager Wu Song, the company's growing presence in overseas markets will boost the image of China's domestically developed vehicles.

"Vehicles produced by Chinese companies have long been stigmatized as being simply low-quality, low-priced models due to manufacturers' relatively low levels of innovation and technology," said Wu.

The Guangzhou-based company will export more advanced domestic vehicles in the years ahead.

GAC is already selling vehicles in markets like South America, the Middle East, Africa and Southeast Asia. It plans to export to North America and Europe starting next year, Wu said.

The company will showcase its latest variants of the GA6 and GS4 in the United States at the North American International Auto Show in Detroit next month, the only Chinese car producer to attend the event.

"We will give priority to major markets including the Middle East, Europe and North America in the years ahead, where there is a growing demand for Chinese high-end vehicles," Wu said.

The company will establish an overseas sales network covering 18 countries and regions and build overseas manufacturing facilities next year.

"We are aiming to build an international brand by focusing more on the overseas market to avoid tough competition for locally developed vehicles in the domestic market," Wu said.

Earlier, the company said it would open factories in Russia and South America to better meet local market demand.

"However, challenges remain as Chinese cars are not very popular in developed markets," Wu said.

Exports of locally developed vehicles rose by an annual average of about 50 percent during the past five years, with shipments reaching 553,000 units for 2013 as a whole, according to industry sources. But exports began to slide in the second half of 2013 as the yuan strengthened.

Exports were down 10.5 percent year-on-year in the first three quarters of this year to 367,000 units, according to industry sources.

"Most Chinese car producers are still exporting low-end vehicles," Wu said.

Chinese cars are expected to face harsh competition in overseas markets as a growing number of joint ventures have begun shipping vehicles, according to Wu. That means vehicle producers must optimize their offerings and improve their brand image.

According to Wu, the company holds many patents, which make its internally developed cars competitive with overseas counterparts.

The company, which was established in 2008 and has a large manufacturing base in Panyu district of Guangzhou, the capital of Guangdong province, will also give priority to developing alternative-fuel vehicles.

The company has invested 100 million yuan ($16.2 million) to boost capacity and promote those vehicles, according to Wu.

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