Chongqing's auto industry sees robust expansion in BRI countries

Chongqing exported 232,000 cars in the first eight months of 2023, up 23.2 percent year-on-year, with Belt and Road countries contributing most of the increase, according to data from Chongqing Customs.

In SAIC Hongyan's KD factory in Tanzania, tractors are rolling off the production line and waiting to hit the local market and neighboring African countries.

Growth in demand is the primary reason clients are choosing SAIC Hongyan products, said a manager at the company's overseas business unit. Belt and Road countries are experiencing continuous growth in infrastructure, logistics, and social services, which trigger a significant rise in demand for commercial vehicles and professional vehicles, according to the manager. SAIC Hongyan generated 195 percent year-on-year growth from overseas markets in the first eight months of this year.

SAIC Hongyan's smart factory in Chongqing Liangjiang New Area. [Photo provided to english.liangjiang.gov.cn]

Under the Belt and Road Initiative (BRI), Chongqing has been making efforts to build a win-win ecosystem for the auto industry in the process of globalization with extensive recognition received and brand effect established.

Thailand introduced tax cuts and other supporting policies to entice Changan Auto, a Chongqing-based leading auto player, to build its factory locally.

Reduced tariffs and non-tariff barriers among BRI countries for cars and other key products, decreased logistics costs for auto parts, integration of the industrial and supply chains, and the intelligent-connected NEV application driven by cooperation between the digital economy and green economy provide great opportunities for the Chongqing auto industry to explore overseas markets.

Data from the China Association of Automobile Manufacturers (CAAM) show that Russia, Saudi Arabia, and Peru were the three major overseas markets for Changan Auto.

Changan Auto implemented its localization strategy after taking a hard hit when entering the Saudi Arabian market in 2015. For instance, extreme heat tests were conducted in the desert to adapt to the local climate and road conditions and personalized configurations were enabled to meet local customers' needs. Changan has accumulated over 60 thousand customers in Saudi Arabia and sells over 30 thousand cars there annually, making it the first Chinese brand among the top 10 car brands in Saudi Arabia.

Changan also benefits from its technology. R&D is equal to 5 percent of its annual sales revenue, and its global R&D layout features 16 technology and product development centers and 17 tech companies, with 17 thousand talents from nearly 30 countries. The company's independent development capabilities include whole cars and auto parts. So far, Changan has entered more than 70 countries and regions.

The Changan Automobile Global R&D Center in Chongqing Liangjiang New Area [Photo provided by Changan]

The success of auto companies demonstrates the overall competitiveness of the Chongqing automobile industry in overseas markets. The municipality has formed an auto cluster featuring more than 10 whole car manufacturers and over a thousand supporting enterprises in the industrial chain. Chongqing has gained an international advantage in intelligent-connected cars, according to the Chongqing Economic and Information Commission.

Brand power has been identified as a weak spot by Changan in its process of global expansion. To tackle the problem, the company plans to release more than 60 products by 2030 and focus on making its cars smarter, more ecofriendly, and better-designed, enhancing the overseas branding for its NEV arms such as Deepal and AVATR.

SAIC Hongyan is focusing closely on market demands and the establishment of a global brand. The company will carry out a transformation from trade to localized production, from traditional energy to the combination of traditional and new energy, and from localized trade to localized operation.

Driven by the BRI, Chongqing is incentivizing local auto players to enhance their international competitiveness and further expand in BRI markets. At the municipal level, financial support, exchanges with other countries and regions on market-entry policies, mutual acceptance of standards and regulations, and other measures are in the works.