In the first half of 2019, Great Wall Motor says it will start vehicle manufacturing operations in Russia’s Tula region.
The US$500m facility of Great Wall Motor is part of the automaker’s plan to increase its global footprint. Headquartered in Baoding, Hebei province in North China, GWM is making its “biggest move” in overseas markets “since our first vehicle went abroad two decades ago”, said Wang Shihui, the company’s general manager for international market operations.
Wang joined GWM in 1999 as a salesman and has been a witness to its global development. According to Wang, the plant in Russia will make self-designed cars from scratch, not just assemble them like in many knock-down plants GWM has set up overseas. With an annual capacity of 150,000 units, the plant will supply to the Russia market and export some of its output to other European markets, Wang said. “Once the Russia plant starts, our overseas volume is expected to increase enormously by 2020,” without revealing any production targets.
The company said it exported 39,168 vehicles last year, up 125% year-on-year. This year, exports are expected to reach 55,000 units.
“I’ve to say the current export volume is not big compared with our best year in 2012 when GWM sold about 100,000 vehicles in foreign countries,” Wang said. His immediate challenge is to fine-tune GWM’s global strategy, maintain steady growth and brighten the company’s brand image. We attach more importance to good reputation of our vehicles than just quantitative increase in sales,” said Wang, who has been developing GWM’s international market for 15 years.
Wang added: “The company learned the hard way how crucial it is to back up production with efficient after-sales operations. In 2012, GWM realised that rapid growth in exports caused problems in after-sales service and supply of spare parts. For more than a decade, selling more vehicles in more countries was the key aim of our global strategy.”
Early success in exports led to robust growth rate, which tempted the company to concentrate on boosting numbers initially, only to shift the focus to quality later. Learning, adapting to changes and exploiting new opportunities have been the hallmarks of GWM’s evolution over the years. For instance, when the company saw a market for pickups developing, it started producing them in 1990s. In 1998, a Chinese construction company bought 60 GWM pickups to be used in infrastructure construction projects in Iraq.
“At first, we only exported based on the orders that came in, still not thinking of exporting our products proactively,” Wang said.
He and his dozen-strong team managed to increase exports via various channels. They found franchisees who helped exhibit vehicles in different countries. Around 2010, nearly 100 countries imported GWM vehicles.
Wang added: “But we started to cut the export volume and vehicles types in 2012 when after-sales service issues emerged, which hurt our reputation. That influenced our long-term development strategies. We started to focus more on the quality of products and after-sales service. We set up overseas research centres, sales branches and knock-down plants. Branches and plants were established to guarantee high-quality development overseas, and were directly managed by the corporate headquarters.
At present, GWM vehicles, mainly SUVs, are exported to about 60 countries. Ecuador, South Africa, Peru, Malaysia, Russia and Australia are the key export markets.
” We are preparing to export our products to the US, India, Brazil and countries in Europe next.”It is not easy to sell China-made vehicles in markets like the US and Europe where the automobile industry is well established and quality-conscious consumers and strict regulations and trade tariffs pose great challenges. But given our achievements in the domestic market, we aim to grow into the world’s SUV leader one day” Wang said.
According to GWM, its SUV sales volumes have topped the domestic market charts for 15 consecutive years since 2003.