In Wake of Trade War, Chinese Automakers Look to Africa and South America Markets
2018-12-20 09:48 Thursday
The trade war between China and the U.S. has led to sagging auto sales in China. To counteract the losses, many Chinese have looked to new overseas markets, in particular Africa and South America.
Asia still constitutes China's primary market overseas auto market. Almost 640 thousand Chinese vehicles were exported to Belt and Road countries, accounting for 60.2% of China's auto exports.
However, things are slowing changing. Chinese automakers' current market share in South America is relatively small, but they are banking on a future of robust growth. A survey from Nelsen revealed that consumers in Mexico, Chile and Egypt are more inclined to purchase Chinese auto brands, with over 40% would willing to purchase a car from a Chinese brand.
As one of the most developed markets in Africa, South Africa is a cornerstone of the African auto industry, and figures heavily in the plans of Chinese automakers.
African auto consumers prioritize cost performance and utility, meaning that the features of Chinese cars perfectly match market demand in Africa. Furthermore, China's Belt and Road strategy also is expected to create a favorable environment for Chinese automakers in Africa.
Chinese automakers have also aggressively courted consumers in South America.
According to the National Automotive Association of Chile, over 30 thousand vehicles from Chinese brands were sold in Chile overthe first half of 2018, the leading position with a 15.6% market share .
Caoa Chery, a joint venture of Brazil's auto manufacturer Grupo Caoa and China's Chery Automobile Co. Ltd., launched the Tiggo 2 model, which is manufactured in Sao Paulo and received positive consumer feedback.
In light of the ongoing trade war, Chinese automakers should extend their global reach and improve their understanding of overseas markets, in order to attain sustainable future growth.