Geely becomes China's top automobile exporter

Updated: 2013-08-30 07:16

By Li Fangfang (China Daily)

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Zhejiang Geely Holding Group became China's largest vehicle exporter in July for the first time ever, as its exports continued to see a strong uptrend, despite the overall sector reporting a year-on-year drop in exports for three consecutive months.

The Hangzhou-based company, which became famous globally after acquiring Swedish automaker Volvo Car Corp in 2010, also set an ambitious target to make exports account for 50 percent of its total sales by 2018, said Yang Xueliang, Geely's spokesman.

Data from the China Association of Automobile Manufacturers showed that Geely exported a record 12,420 vehicles in July, overtaking Chery Automobile Co, which exported 10,800 units and has dominated the sector for over six years.

Geely's total exports in the first seven months also represented a 27 percent year-on-year increase, against a 2.2 percent drop in China's overall vehicle exports.

From January to July, China - the world's largest automobile market - exported 567,500 vehicles.

In July, the country's combined exports were down 5.4 percent year-on-year, following a 21 percent drop in June and a 16.1 percent decrease in May.

Dong Yang, deputy chief of the China Association of Automobile Manufacturers, attributed the export decline to the weak demand in emerging markets, as well as the yuan's appreciation.

"We see a big drop in demand for Chinese vehicles in Iraq, Iran, Vietnam and Turkey," Dong said.

Geely was the only company among the four major Chinese exporters that reported an increase in exports in the first seven months of the year. The four major exporters also include Chery, Great Wall Motors Co Ltd and Lifan Group, which in total dominate 75 percent of the sector.

"We hope that Geely can sustain the export momentum in the coming months. Though it's hard for us to achieve the previous target of exporting 150,000 vehicles this year due to the challenging overseas markets, if we can keep this pace of 30 percent increase, we will see exports of more than 130,000 units in 2013," Yang said.

Yang also told China Daily that Geely's robust growth amid Chery's downtrend, gives the company confidence that it will be the leading company in terms of exports this year.

On Thursday, Geely held a ceremony in its Chengdu plant to ship 600 Geely GX7 SUVs to the Middle East. The vehicles are worth between $2.5 and 2.6 million.

"Geely can see an increase in exports amid the gloomy market environment. This is a result of the heavy efforts we made to have a stable foothold in overseas markets during the past 10 years," said Yang.

He also attributed the strong exports to Geely's competitive product line. He said the company has made significant investments to tailor products for the requirements of different markets.

China has been the world's largest automobile market for four consecutive years. However, the domestic market has been dominated by strong foreign automakers and their joint venture brands, which are still grabbing market share from domestic players.

Analysts said that it's likely that some Chinese automakers will find additional business opportunities outside China in the future, especially in developing countries.

In recent years, after some Chinese players firmly established their brands in overseas markets, they started to speed up their expansion drive through the establishment of assembly plants.

Geely has already set up facilities in eight countries, while Chery has 17 assembly plants abroad that are already operational or under construction.

In February, Geely set up a research and development center in Gothenburg, Sweden.

The center will develop modular-architecture design projects and sets of components for C-segment cars, addressing the needs of both Volvo and Geely, and leveraging Volvo's technological know-how.

Yang said that Geely's models developed in the center, expected to be released in 2016, may help the company to tap mature European markets.

(China Daily 08/30/2013 page14)