Editor's Note:
The global automotive industry landscape is accelerating its restructuring, and China's automotive globalization is entering a new stage from "going out" to "taking root." Various forecasts suggest that China's vehicle exports are expected to exceed 10 million units this year. But 10 million units is not the endpoint. As competition in overseas markets deepens, how should international cooperation pathways be chosen? How can companies move from product and manufacturing going-global to systematic layout of supply chains, services, and ecosystems? How should different types of enterprises build globalization models that match their own capabilities?
Following the first issue, Part One "Shifts in the Landscape," this second part will focus on "Shifts in Capabilities," further answering how China's automotive industry can truly go global. Chairman Zhang Yongwei analyzes from dimensions including going-global stages, enterprise types, and cooperation models, exploring how to tailor strategies to different enterprises, moving from asset-light exploration to deep localization and from product going-global to ecosystem going-global.
Question 1: At the strategic level, what stages do Chinese automakers roughly go through when going global?
Zhang Yongwei: Going global is a strategy, but it must be pursued step by step. We do not advocate rushing overseas when conditions are not yet in place, as this can easily lead to falling into the "internationalization trap." Going global should be based on one's own capabilities and conditions, and evolve in stages. Overall, there are three stages:
Stage One: Asset-light exploration period, primarily trade-based. Products are developed and manufactured domestically and then expanded into overseas markets through trade. There are two specific paths: first, building one's own overseas sales network; second, leveraging existing local dealer networks and finding closely cooperating partners to help enterprises familiarize themselves with the market more quickly and reduce trial-and-error costs. However, the trade model has a ceiling. As export scale expands — China's vehicle overseas sales are expected to exceed 10 million units this year, with an optimistic estimate of 11 million units, plus trillion-yuan-level parts and components exports — enterprises will face increasing tariffs and non-trade barriers. Therefore, for enterprises new to overseas markets, finding quality dealer partners is crucial.
Stage Two: Deep localization period. More and more countries want to develop local manufacturing and use foreign investment to drive local industrial development. Therefore, after Chinese automakers and parts and components enterprises "go out," they will also face clearer localization requirements, including investing in local factories and developing industrial chains.
Localization can help enterprises circumvent some trade barriers and integrate more deeply into local markets. But enterprises must also address new challenges such as compliance and supply chains. For example, in environmental protection, labor, and data, they need to fully understand local regulations; in supply chains, they need to solve how to build a competitive local supply system. Therefore, localization is not just about building a factory; more importantly, it is about solving a series of issues including compliance, local supply chains, and operating systems.
In addition, enterprises can expand into overseas markets by cooperating with multinational companies in China. These companies are shifting from "in China for China" to "in China for the world," possessing mature overseas networks and cross-cultural operational capabilities, and can become important partners for Chinese enterprises' globalization.
Stage Three: Integration into local ecosystem building period. After enterprises sell products overseas, they will find that what truly determines long-term competitiveness is not just the product itself, but also service systems such as maintenance, spare parts, charging, and finance. These services have strong localization attributes, and it is difficult to rely entirely on Chinese enterprises to relocate the entire service system overseas. Therefore, enterprises need to build and integrate into a service-centered ecosystem locally. Once the system is established, it forms systemic capabilities and a moat, supporting the enterprise's long-term development overseas.
Question 2: Among the "three stages," what specific paths should different types of automakers adopt?
Zhang Yongwei: Different types of enterprises should choose going-global strategies suited to their own characteristics.
Large automakers with strong capabilities, capital, brands, and overseas operational experience: Adopt a "both heavy and light" approach to globalization. "Heavy" means deploying manufacturing capabilities in strategic markets and forming a global production layout through investment in factories; "light" means utilizing global existing capacity, through acquisition, leasing, or renovation, to land overseas production at lower cost without building from scratch.
Emerging automakers and technology companies have two paths: first, utilizing external production capacity and quickly entering overseas markets through contract manufacturing; second, leveraging existing local brands to reduce the time and cost of brand rebuilding. Brands and factories are local, while technology and manufacturing capabilities are exported from China.
Parts and components enterprises can take a cooperative internationalization path: following automakers to obtain orders, but without heavy asset investment. Through technology licensing, production cooperation, and other methods, they can partner with local players to achieve local supporting production and reduce one-time investment pressure. At the same time, they should avoid over-reliance on a single customer. Following one automaker "going out" is only the first step; the key is to gradually achieve customer localization and diversification, moving from "one to two" to "one to many," enhancing bargaining power and diversifying operational risks.
Service-oriented enterprises in parts, intelligentization, and software: The core is the migration of service models. Overseas services are generally inefficient and costly, while China has already achieved full-chain digitalization through payment, purchasing, and service links, improving efficiency and reducing costs. Replicating China's proven digital advantages overseas and taking the path of service going-global is an effective pathway for SMEs to break through.
Question 3: For Chinese automakers, what is the most pragmatic going-global strategy at present?
Zhang Yongwei: One pathway currently worth focusing on is cooperation-based localization. For example, jointly building manufacturing plants with local partners can quickly reduce compliance and legal risks. Cooperative factory building and supply chain building are choices more suited to the new environment.
In the past, internationalization often came at the cost of "eliminating opponents" — I come, and others cannot survive. But against the backdrop of increasingly complex geopolitics and rising development demands of host countries, this model is unsustainable. To achieve genuine cooperation, the first step is to change business philosophy, one important shift being from exclusive benefit-sharing to shared benefits. An industry involves multiple links including manufacturing, sales, parts, and services. If an enterprise wants to keep all benefits in its own hands, it will be difficult to establish long-term cooperative relationships.
Conversely, if an enterprise earns reasonable returns in the areas where it is srtongest while leaving room for local partners to participate in sales, components, and services to local partners, local enterprises can also gain development space.This create a more stable cooperative relationship can be formed. This is true "Win-Win" cooperation.
