Chinese carmakers eyeing overseas markets

Nuying Huang, Taipei; Ines Lin, DIGITIMES Asia 0

XPeng's P5 model is open for preorders in several European countries. Credit: XPeng

Several Chinese carmakers, including XPeng, GAC Group and Leapmotor, shared their experiences on brand upgrading during a recent online forum, highlighting their efforts of catching up with foreign marques' joint ventures in China and expanding global market presence.

The increasing electrification of vehicles has altered vehicle brand values. China's ICT industry supply chain is solid and covers cellphones, PCs and smart cars, while the general consumption power of Chinese people is improving, the carmakers said.

With more customers showing confidence in their cars, Chinese carmakers have moved on to adjust their brand positioning strategies. They seek to approach the top-tier of the Chinese market that was dominated by foreign automakers and their JV brands.

Some cars produced by Chinese brands are already sold at higher prices than those made by JV brands. To sustain their advantages, Chinese brands must improve themselves in the following areas: their core technology, safety, secutiry and customer engagement, they said.

For core technology, unlike traditional carmakers that put more emphasis on hardware standards, smart cars developers have to obtain both hardware and software technologies to ensure the communications of interconnected systems can work smoothly. XPeng has said vehicle intellectualization will be its core competitiveness.

Vehicle intellectualization is built on driving safety and information security.

Customer needs are the basis for smart car development, but carmakers should be able to create additional features, they said. They must let customers know feature upgrades are not auxiliary services but must-dos, so customers will grow their reliance on the features.

Some Chinese carmakers said vehicle intellectualization will come to involve the competition of ecosystems. Therefore, carmakers are driven to enhance their own R&D capabilities, charging services, and peripheral resources.

Many Chinese carmakers are also working to expand their global presence. XPeng has opened retail stores in several European countries. Leapmotor is developing new models for exports.

For Chinese carmakers that aim to explore foreign markets, complying with local regulations is a prerequisite. They also need to be more far-sighted and create valuable models, instead of only seeking short-term gains, so they might get rid of the bias that China-made products are cheap, they said.

Industry sources said Chinese carmakers are getting closer to JV brands in terms of brand values, at a time when many JV brands have problems with production due to automotive chip shortages. Customers in China are usually open to new things, a favorable condition for the sales of smart cars.