In the most recent week, Wang Shihui, deputy general manager of Great Wall Motors’ overseas market, continuously received inquiries about Renault’s joint venture with the Great Wall in Venezuela. He had to make clarifications over and over again, without this, not the Great Wall and Renault, but Great Wall's distributor in Venezuela signed an assembly agreement with Renault.
This news about Renault and Great Wall Motors' overseas alliances, originally originated from a report by overseas media, has aroused great concern in the domestic automotive media. Compared with the false news that domestic companies have “dig out the bottom†in recent days, the credibility of this news seems to be higher.
After all, for the domestic auto companies that lack overseas operating experience and have a low level of internationalization, it is still very challenging to diversify their assets and reduce the assets of auto giants. However, it seems easier to join international auto companies in exploring overseas markets.
Unfortunately, this news was eventually confirmed to be false news. Even if the Great Wall Motors, which were relatively advanced overseas and have relatively rich experience in overseas markets, currently do not consider the joint efforts of international car companies in overseas markets.
Industry analysts believe that this again shows that domestic car companies have a long way to go in their dream of “going outâ€.
Another overseas fake news
Since the second half of last year, overseas media have repeatedly reported on the news that domestic car makers have been hunters overseas. Each time it attracted the attention of the domestic auto industry, but most of the news was finally confirmed as false news.
A recent overseas report on the joint venture between Renault and Great Wall Motors in Venezuela also stimulated the nerves of the domestic automotive media.
According to foreign reports, in mid-June, Renault and Great Wall Motors signed a letter of intent to sign a joint venture in Venezuela.
The production will be carried out in a factory of the Great Wall Company's local partner. The factory plans to produce 22,000 vehicles a year, of which 15,000 will be produced by Renault and the remainder will be produced by Great Wall. Renault will produce the Logan sedan and the Sandero hatchback. Some parts will be imported from Colombia, and Colombia has been producing Logan cars for four years.
If the plan is implemented, Renault will invest 10 million U.S. dollars and Great Wall will invest 65 million U.S. dollars.
“Our local dealer originally planned to build a KD assembly plant with an annual capacity of 22,000 to 25,000 units to produce Great Wall brand cars. Later, Renault found the dealer and hoped it would also assemble the Renault-branded car. Renault signed a cooperation agreement. In the future, the Assembly Plant will assemble the Great Wall brand and also assemble the Renault brand cars.†On June 23, Wang Shihui told reporters that the Great Wall and Renault had no joint venture or cooperation plans.
Wang Shihui said that the Great Wall will report a $65 million investment in Venezuela's factory. Renault expects to invest $15 million in content that is not true. The cooperation between Great Wall and Renault and local distributors belongs to the level of brand authorization and technology cooperation, and there is no capital investment.
The background of the cooperation between the two companies and Venezuela dealers to build an assembly plant is a major change in local policies: At the end of 2007, the Venezuelan government issued a regulation that requires foreign cars to be sold locally and must adopt a method of cooperation and assembly with local manufacturers.
This policy change has a great impact on the local automobile market. In 2008, Renault sold 10,000 vehicles in Venezuela, which was significantly lower than the 28,000 in 2007. Renault, who is reluctant to give up the market, is eager to find partners in the area.
Before the domestic independent brand enterprises were very optimistic about the Venezuelan market, in addition to the Great Wall, Chery, Geely, Hafei, Wuling, Chang'an and BYD, Jiangling and other companies have entered the market. Due to the small size of the Venezuelan market, it is not easy to invest in finding local partners to assemble. After the policy changes, some domestic companies simply withdrew from the local market after careful consideration.
The reason why Great Wall Motor did not withdraw is because Venezuela is an important export market for Great Wall Motors. Wang Shihui said that the Great Wall has entered the Venezuelan market since 2004 and entered the market earlier. Before the policy change, Great Wall Motor’s local sales have reached more than 3,000 vehicles per year. In recent years, Great Wall Motor’s local ownership has been considerable.
Great Wall dealers in Venezuela have established six sales centers in several medium-sized cities. In addition to SUV products, the splendor of sedan products launched by the Great Wall and dazzling are also popular in Venezuela. Against this background, Great Wall Motor chose to set up an assembly plant in the local area. The local distributors were responsible for physical investment such as land, factory buildings, and labor, while Great Wall Motors invested in non-cash methods such as branding and technology.
Overseas borrowing is not yet mature
The reason why Renault's cooperation with the Great Wall in Venezuela's cooperation with the construction of the plant caused the domestic media to pay close attention is because it is more feasible to join hands with international car companies in exploring overseas markets than to go overseas.
Wang Shihui also said that although the current Great Wall and Renault have no joint venture plan in Venezuela, they do not rule out a future cooperation plan.
In fact, domestic car companies with insufficient experience in overseas markets would like to use the brand recognition of international car companies, as well as a sound overseas sales network and rich market experience to “go out†better.
For example, in the strategic cooperation agreement signed by Beiqi Foton and Daimler Benz last year, one of the important contents was to jointly explore overseas markets. The Futian brand heavy truck will be included in Mercedes-Benz's global sales network.
Previously, Zhengzhou Nissan also reported that it would use Nissan’s overseas sales network to export its products. These seemingly good plans are still in the oral stage and there is no substantive progress.
An automotive analyst believes that the global sales network and brand reputation of international car companies are accumulated after a long period of efforts. In the absence of any assurance on the quality of domestic car companies and the level of overseas operations, international car companies The company will not easily cooperate with domestic car manufacturers in overseas markets.