Chinese Automakers Growlongside ASEAN Counterparts

By Wang Jiping

The car has become the most prevalent means of transportation around the world. However, until the late 1990s, the development of the automobile industry in some ASEAN countries remained slow due to backward infrastructure and poverty.

In recent years, ASEAN member states have introduced development strategies that meet the characteristics of their respective national conditions and actively participated in global development initiatives such as the “Belt and Road.”Consequently, the economies of ASEAN countries have grown rapidly, which has led to continuous improvements in living standards and greater demand for motor vehicles.

According to a forecast issued by ASEAN Automotive Federation in 2017, ASEAN,with a population of more than 600 million, will be thefifth largest car market in the world by 2020. This huge potential has boosted the enthusiasm of automobile manufacturers around the world, major Chinese car makers included.

Chinese automobile companies such as SAIC Motor Corporation Limited (SAIC Motor) and SGMW have actively tapped the markets of Thailand and Myanmar while teaming up with professional organizations from both China and ASEAN countries to conduct research on car standards, laws and regulations in China and ASEAN member states to promote joint development and technical progress of the automobile industries of both sides.Vision Brings about Cooperation

As the Belt and Road Initiative has continuously expanded, the benefits brought by the ASEAN-China Free Trade Area have become increasingly obvious. Vehicles made by Chinese car manufacturers have gained more recognition in the Southeast Asian markets.Even in Thailand, the largest car-producing country in ASEAN, it is easy for Chinese car makers to find business partners quickly.

In 2013, SAIC Motor and Charoen Pokphand Group established a joint venture SAIC Motor-CP Co. in Thailand,which is also one of the largest production bases of SAIC Motor overseas. The 10,000th car rolled off its production line in June 2014.

At the end of 2017, SAIC Motor-CP Co. completed construction of a new factory and began production. Thai Deputy Prime Minister Somkid Jatusripitak said at the inaugural ceremony that operation of the new factory created a perfect link between Thailand’s Eastern Economic Corridor and China’s Belt and Road Initiative.

Myanmar, the second largest country in ASEAN in land area, has not yet established its own automobile industry.Contrasting the expensive cars made by the U.S. and the European countries, high quality, affordable and practical Chinese cars have been better received by locals.

Malaysian Prime Minister Najib Razak( first left) shakes hands with Li Shufu, founder and chairman of Zhejiang Geely Holding Group,next to a Geely Boyue SUV during a signing ceremony between DRBHicom Bhd. and Geely in Kuala Lumpur, Malaysia in June 2017.

By April 2017, Zhengzhou Yutong Group Co., Ltd., a large-scale industrial group mainly specialized in bus production, had sold more than 1,000 cars since it entered the Myanmar market in 2010.

Special-purpose vehicles made by China National Heavy Duty Truck Group Co., Ltd. (Sinotruk) have also been popular in Myanmar.Engineering dump trucks manufactured by Sinotruk have been widely used in industrial production and transportation in Myanmar.

Industry insiders predict that once ASEAN-China Free Trade Area Preferential Tariff Certificate of Origin comes into effect,ASEAN member states will enjoy tariff-free trade of normal products.As a result,demand for cars in ASEAN countries will continue to increase dramatically.

Confero S

SGMW Motor Indonesia has become a role model in the industry in this regard. According to data from SGMW Motor Indonesia, the company has already created more than 3,000 jobs since it began operation in July 2017. Confero S,thefirst car model from SGMW Motor Indonesia,is a family multipurpose vehicle that was honored as the best new car of the year in 2017.ASEAN,with a population of more than 600 million,will be thefifth largest car market in the world by 2020.

Seamless Win-Win Cooperation

As Chinese companies have continued to accumulate experience by cooperating with foreign counterparts and doing business overseas, they have come to realize that in order to maintain sound and long-term cooperation with foreign business partners,Chinese enterprises need to focus on win-win cooperation instead of immediate benefits.Therefore, the top priority on the agenda of Chinese car makers is their social responsibilities to ASEAN.

SGMW Motor Indonesia has become a role model in the industry in this regard.According to data from SGMW Motor Indonesia, the company has already created more than 3,000 jobs since it began operation in July 2017. Confero S, thefirst car model from SGMW Motor Indonesia, is a family multi-purpose vehicle that was honored as the best new car of the year in 2017.

Another Chinese car maker, Geely Auto Group, has remained staunchly committed to the long-term research,development and production of energy-saving vehicles since it entered Malaysia.Geely Auto has made major contributions to energy conservation and emissions reduction in Malaysia.

Chinese automobile companies have also adopted a model of learning from each other by exchanging views to advance localization in ASEAN. Recently, as SGMW was in talks with authorities in Thailand and Malaysia, the company established a China ASEAN Automotive Standards and Regulations Research Center in Jakarta, which aims to make its products optimally meet the needs of local consumers and facilitate seamless cooperation between Chinese car makers and ASEAN counterparts.

Guangxi Automobile Group Co., Ltd., based in Liuzhou,an emerging auto producing city in north-central Guangxi Zhuang Autonomous Region and the closest Chinese city to ASEAN, has frequently welcomed delegations from the business and political communities of Laos and other countries, which has further expanded bilateral cooperation and enabled delegations to gain first-hand experience on China’s automobile industrial system and obtain the related development experience to facilitate the establishment of their own system.

Bai Ming, research fellow at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce,explained that Chinese car makers and their counterparts from ASEAN countries jointly develop production standards and visit industrial parks, which is conducive to promoting transparent and fair cooperation between the two sides and enhances cooperation efficiency as well as showcasing the sincerity of the two parties.

At the same time, these methods will also lay a foundation for both sides to conduct high-end cooperation in terms of future intelligentization of the auto industry and expansion of research on related subjects as well as strengthening capabilities in monitoring whether exported cars remain consistent with vehicle standards, local laws and regulations as well as environmental protection requirements in the target country to form a more specialized, systematic and wider win-win cooperation system, according to Bai Ming.