China's Changan Goes Abroad

Bertel Schmitt
by Bertel Schmitt

The dreaded huge wave of cheap Chinese exports – is still not happening. Instead, China’s Changan exports factories.

“We are looking at building automobile assembly plants in foreign markets including Russia and Brazil,” Xu Liuping, board chairman of Shenzhen-listed Changan told China Daily.

Changan (a.k.a. Chana) is owned by China’s largest military industrial group, China South Industries Group Corp. Changan has a long standing joint venture with Ford.

While other carmakers produce little more than noise when it comes to own brands, Changan quietly became China’s largest maker of indigenous brands.

By 2020, Changan wants to produce 4 million automobiles annually under its independent brands. Changan already has six foreign factories in Mexico, Egypt and other countries.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Tosh Tosh on May 22, 2012

    While technically Mexico may be "abroad," seems to me they're right NEXT DOOR. Hello, China is making cars NEXT DOOR!

  • Sportyaccordy Sportyaccordy on May 22, 2012

    I am like, deathly curious as to how its cheaper to export the factories I guess they save on shipping? Are there geographic differences in prices of steel? I guess they have run the numbers. The other biggie is how are they so sure folks in these countries WANT these cars? In Mexico for example the king of sales is the Nissan Tsuru (aka B13 Sentra). It sells for about $9-10K new. How do they plan to compete?

    • See 1 previous
    • Tekdemon Tekdemon on May 24, 2012

      Probably a combination of tax policies (hefty import duties in a lot of places) and the fact that it's a lot easier to get people to buy more of the cars if they're not imports but made at home.

  • LordDetroitofLondon LordDetroitofLondon on May 22, 2012

    Maybe Mazda can license this design? Looks a lot better than most of the current Mazdas...

  • Glen.H Glen.H on May 23, 2012

    Exporting factories provides a buffer against currency fluctuations- if an emergent market like Mexico's has a crash in the value of its currency import prices rocket. If you have local production you also can get around protectionist barriers, which is increasingly likely in the current economic climate.

    • Lorenzo Lorenzo on May 23, 2012

      All good points. Another is that China imports much of its iron ore. Mexico is an ore producing country with its own steel industry. Yet another is the cost of transport from China, and the world price of oil is much higher than the domestic WTI price. Mexico has existing auto plants so there's a pool of experienced workers to tap into, and don't forget NAFTA. Mexican made Chinese vehicles, if they can pass standards, can be sold in the U.S., though they'd need to start a dealership/parts distribution network from scratch. If the Chinese play their cards right, they'd have an easier entry to the U.S. market than the Japanese did.

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