Great Wall Motors defies industry slowdown(2)

Overseas expedition

Asits own auto market slows, China's exports to overseas markets are surging.According to the the China Association of Automobile Manufacturers, the countryexported 814,300 vehicles in 2011, 49 percent higher than in 2010. Among thedomestic manufacturers, Great Wall Motors exported 83,000 units, among whichthere were 13,200 sedans, 34,300 SUVs and 35,600 pickup trucks.

Forthe first seven months of this year, it exported 63,995 units, up 16.75 percentfrom the same period last year. Now, Great Wall vehicles are seen in more than100 countries and regions with 800 dealers present in 80 countries.

GreatWall Motors is preparing to increase in exports to emerging markets. "Theyare easy for us to operate in," said Shang. Russia is now Great Wall'slargest export destination. A quarter of Great Wall's total exports last year,20,000 vehicles, were sold to Russia and sales in the country are expected tototal 100,000 vehicles in 2015.

"Whilewe have previously targeted emerging markets, our latest desired market is theEU," said Shang. Great Wall Motors just launched operations in Bulgaria inFebruary, becoming the first Chinese automaker to assemble cars in the EU.Since Bulgaria is an EU member, the project provides Great Wall Motors withaccess to other EU countries at zero tariff levels.The UK recently welcomed its first model - Great Wall's Steed double-cabpickup, built at the Bulgaria plant with a selling price of 13,998 pounds($22,404).

Challenges

Globalautomakers have made their models as affordable as domestic brands.

Eventhough Chinese carmakers have scored well in automotive crash testing, changingmotorists' perceptions of the inferiority of domestic brands will take time.Great Wall Motor is no exception and its brand remains weak both abroad and athome.

"Weare confident in our overseas moves. Although we're still suffering from a weakbrand image and consumer doubts, we have been met with great popularity in thelow-end market," said Shang. Lower prices always seem more appealing. Theroomy and well equipped Haval H6 is priced between 110,000 yuan to 120,000yuan, while Honda's CRV with similar features costs about 180,000 yuan to200,000 yuan. In the EU and the United States, a locally produced pickupusually costs $100,000 or more, while a Great Wall pickup is priced at $10,000to $20,000.

Inthe United States, Japan and South Korea, where the auto industry is quitedeveloped, customers are more loyal to familiar brands. "Higher thresholdsin these countries make it difficult for us to enter," said Shang.Nonetheless, the carmaker is eyeing Canada and the United States.

GreatWall's exports are expected to top 300,000 vehicles in 2015. By that time,exports should account for 20 percent of its total sales.

Tobecome a world-class player, Great Wall Motors may have to shift to a moreextensive development model. Further improvements should be made in after-salesservice, Shang said. Another major hurdle in its development is its currentsales network and overall customer service, which lag behind competitors. GreatWall Motors still needs to upgrade its enterprise management system and enrichits corporate culture, he said.