lan qingxin and wu yue: chinese cars are popular in south america, and four aspects need to be done to improve "pioneering power"
2024-08-29
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in recent years, chinese cars have been popular in the south american market, and the scale of sales has continued to expand. taking brazil, the largest automobile market in south america, as an example, the country has become the third largest export destination for chinese cars and the largest destination for chinese new energy vehicles, and is an important country for china's automobile exports. statistics from the brazilian ministry of industry and trade show that in the first half of 2024, brazil's imports of cars from china increased by more than 7 times compared with the same period in 2023, accounting for 57.5% of brazil's total imports of passenger cars, of which electric vehicles accounted for 91.4% of brazil's total imports of electric passenger cars. china has become brazil's largest source of imported cars.
the reason why chinese cars are favored by south american car consumers is that chinese cars have strong comprehensive competitive advantages. first, the industry chain is fully covered. thanks to the strong manufacturing system, china has achieved full coverage of the industry chain in the fields of traditional fuel vehicles and new energy vehicles. the automobile manufacturing industry has a strong scale effect and prominent cost advantages. second, it is led by technological innovation. under the background of a new round of industrial transformation, china's automobile industry has seized the development opportunities of electrification and intelligence, actively laid out technical innovation directions such as pure electric, plug-in hybrid, and hydrogen fuel, and promoted product iteration and upgrading. today, the total number of valid patents of the top 10 key enterprises in china's new energy vehicle sales has exceeded 100,000. third, product quality has been improved. relying on a super-large market with a population of more than 1.4 billion, chinese cars have actively responded to the diversified needs of consumers in terms of product innovation, appearance design, sales model, customer experience, etc., and have both technical and quality advantages to build competitiveness against global brands. in this regard, south america is mostly a developing country with large internal differences, and pragmatism is the general preference of local car consumers. chinese automobile products have obvious cost-effectiveness advantages and high competitiveness, which is also an important reason for the continuous expansion of the chinese automobile market in south america.
on the other hand, chinese cars are very suitable for the energy transformation needs of south american countries. decarbonization and emission reduction in the automotive industry is an important part of promoting energy transformation in south america. major south american automobile market countries such as brazil and chile have formulated energy consumption requirements for the automotive industry, and have successively introduced various measures such as tax exemptions and financial subsidies to support the promotion of new energy vehicles. from the "rota 2030" plan implemented in november 2018 to the recent "mover" plan, the brazilian government has strengthened the energy consumption requirements for automobiles and formulated vehicle carbon emission measurement standards involving vehicle production, use and disposal, so that brazil's electric vehicle sales in 2023 increased by 90.7% year-on-year. according to the national electric mobility strategy released by chile in 2021, chile's zero-emission vehicles will fully cover small and medium-sized cars and public transportation vehicles by 2035, and the coverage will be further expanded to all land transport vehicles by 2045. the ambitious strategy is reflected in reality, that is, from january to may this year, chile's electric vehicle sales increased by nearly 100% year-on-year.
it is worth noting that while the market share of chinese automobiles in south america is growing rapidly, the industry protection it faces is also gradually increasing. in order to revitalize the local automobile industry, the brazilian government announced that it will gradually restore the 35% import tariff on new energy vehicles in 2026. many automakers, including general motors and toyota, have increased their investment in brazil. chinese automakers are also actively deploying production bases in south america, but they still face challenges such as intensified market competition and localization.
in the future, chinese automakers should follow the development trend of "going global", continuously optimize their production and sales layout in south america, enhance their own global operation capabilities, and take multiple measures to continuously improve their "pioneering power" in the local automobile market.
first, we must rely on technological innovation to respond to market demand, maintain our country's advantages in new energy vehicle technology research and development and application, actively combine the actual conditions and transformation needs of the south american market to promote technological progress and product iteration, and adapt to local consumers' usage scenarios and habits, such as accelerating the launch of ethanol-fueled new energy vehicles in the brazilian market.
the second is to rely on talent training to respond to differentiated challenges, strengthen the training and team building of local talents through capacity building and vocational training, optimize team management and incentive mechanisms, and continuously improve the localization level of chinese brands.
the third is to expand market share by relying on the supporting industrial chain. in addition to the whole vehicle, chinese automakers should also speed up the layout of localized production of supporting industrial chains such as power batteries and charging piles. this will not only effectively play a synergistic effect, enhance the resilience of the industrial chain supply chain, and reduce operating costs, but also improve the technical level and manufacturing level of the local new energy vehicle industry, promote the construction of the local charging infrastructure system, and then cultivate the new energy vehicle consumer market, which will further expand the market space from a long-term perspective.
fourth, rely on esg strategy to establish a corporate image. depending on the target country, companies should clarify their position and commitment on sustainable development, ensure that their business and operations comply with local regulatory standards, and integrate them into all aspects of their production and operations, focusing on key areas such as proactive information disclosure, employee welfare construction, and corporate value construction, to comprehensively enhance the brand power and influence of chinese automobiles. (the authors are respectively the director of the brics research center of the university of international business and economics, the vice dean and professor of the school of international economics and trade, and a doctoral student of the school of international economics and trade)
