Hu Fengju: The biggest opportunity for Chinese bus exports in South America and Africa

With the increasingly saturated domestic market, Chinese bus companies are actively exploring overseas markets.

The global passenger car market has sold less than 400,000 vehicles a year, of which Chinese bus companies have accounted for more than 40%. Hu Fengchao, overseas marketing director of Yutong Bus, pointed out in an exclusive interview with reporters that the development of passenger cars is generally related to the degree of development of the national economy. The more they are in developing countries, the greater the market demand is. “The biggest opportunity now is Latin America. There are two places in Africa, but the development in Africa is still not enough. Latin America is relatively better."

According to Hu Fengju, Chinese bus companies have entered the entire Central and South America except Brazil, Argentina and Mexico, and other markets have entered, with an average market share of 30% to 40%.

Competing for South America On July 21, under the joint witness of Chinese President Xi Jinping and Venezuelan President Nicolas Maduro, Yutong Bus Chairman Tang Yuxiang and Venezuela’s Minister of Communications Haman Trudi signed a memorandum of cooperation on 1,500 buses. . Behind the big orders is Yutong Bus, which has established a joint venture with the Ministry of Industry of Venezuela and the Ministry of Land Transportation, with an initial designed capacity of 3,600 vehicles.

As the most promising South American market, almost all the global bus companies have gathered, especially the Brazilian car company Marco Polo using Mercedes-Benz chassis, but also has a home field advantage, controlling more than 60% of the market.

Hu Fengju indicated that with the development of China's economy, especially with the popularity of cars and high-speed rails, it has been difficult for the domestic passenger car market to experience rapid development in the past. However, many developing countries abroad, especially the economic development rate, are relatively high. The South American countries gave the opportunity for the Chinese bus companies to continue their development. "At least you can also grab someone else. In Venezuela, we are the Marco Polo and Mercedes (market)."

In the South American market, Marco Polo’s market share is more than 60%, in addition to the 30%~40% market share snatched by Chinese car companies, and the rest are returned to Mercedes-Benz, Volvo, MAN and other old passenger car companies.

From Yutong’s first order to Cuba in 2005, Chinese bus companies have already mastered the markets of Cuba and Venezuela. In addition, 70% of Chile’s bus market has also been acquired by Chinese bus companies, and Uruguay, Peru, Colombia, and Ecuador have also become In the main battlefield of Chinese bus companies, only Brazil, Argentina, and Mexico have set high trade barriers. It is difficult for these markets to have room for Chinese car companies.

The fierce competition has also made the overseas development model of Chinese bus companies more and more mature: from the initial "waiting for the rabbit" style to wait for customers to come to the door, and later to send a few people abroad to "hunting" the "shotgun big bird" and hit where Which one is only for simple trade? Now at least in South America, deep farming has been started.

Take this example of Yutong’s acquisition of 1,500 large vehicles in Venezuela, Yutong buses should not only provide Venezuela with vehicles and related accessories, tools, maintenance, etc., but also involve smart bus operation management systems. This shows that the cooperation between Yutong Bus and Venezuela has extended from the product and technology level to the construction of the local intelligent public transport system.

Hu Fengju said that the market determines the factory, and the bus market in Cuba and Venezuela has been basically occupied by Chinese bus companies. “The newly-built joint venture will first satisfy Venezuela’s domestic consumer demand and then consider radiating to neighboring countries”.

At present, the annual demand for passenger cars in Venezuela ranges from 3,000 to 4,000, of which Yutong is able to obtain more than normal business. However, in the passenger car market in Cuba, Yutong not only occupied the entire market, but also received Castro's support and recognition, Yutong’s business in Venezuela was introduced by Castro.

Yutong’s business in Venezuela has also been relatively smooth. Among them, the company received orders for more than 1,000 vehicles in 2012 and 2,000 in 2013. Hu Fengju introduced that "Yutong has formed a good reputation and influence in Venezuela, and this market will have enough to support the operation of a factory."

The potential market is Europe, America and Southeast Asia <br>
<br> from the initial hundreds of vehicles, thousands of vehicles, to 24,000 in 2013, to 26,000 this year to almost, China's vehicle exports have accounted for the total passenger car market sales Of 14%. Chinese bus companies have become an important force influencing the development of global passenger cars.

"At least for now, I know that Volvo and Mercedes-Benz are using Yutong as a research object. When these first-line brands do research on customer satisfaction, they will regard Yutong as a very threatening opponent." Hu Feng described this reporter last year to this reporter. At the press conference of the Belgian Bus Show, Yutong said, “We held a press conference. Basically, many customers and competitors have gone and the chairs are not enough. There are two or three people outside.”

Hu Fengju said that these so-called competitors are Mercedes-Benz, MAN, Volvo and other mainstream bus companies. They are now very sensitive to Yutong’s move. “We are involved in tendering for some European customers. As long as we are involved, the prices of Mercedes-Benz and MAN will drop drastically. We will never think of the price they drop.”

The pricing of Chinese bus companies in overseas markets is generally 20% to 30% lower than that of first-tier brands. Although these first-line brands will significantly reduce their prices when they encounter Yutong at the current stage, Hu Feng thinks that Yutong will definitely develop to the high end in the future. "I think Europe and the United States are a potential market for Yutong."

In fact, the sales of first-line brands have become less and less over the years. Mercedes-Benz has sold 30,000 to 40,000 vehicles a year worldwide, Volvo buses may have 8,000 to 10,000 vehicles, and MAN has sold about 5,000 vehicles a year. Of these, 80% of orders are sold outside of Europe, of which 90% are chassis sales.

In international trade, there are two barriers that Chinese bus companies often encounter. Among them, trade barriers are most often encountered in markets such as Southeast Asia, South Africa, and Russia. In order to protect local industries, the local market imposes higher tariffs on vehicles. In this case, companies generally establish KD factories locally to disperse them. Export in the form of pieces. However, European and American markets generally set technical barriers.

Hu Fengju said that developed countries such as Europe and the United States do not want Chinese bus companies to enter, fearing that Chinese cheap passenger cars will greatly impact the local market, so they set up many technical barriers and the threshold for certification is very high. "For example, if a Chinese bus company wants to enter Europe, it will first require that your emission standards reach Euro 6, so that you have to use its (Europe) engine."

At present, in the traditional European and American markets, Yutong is doing a better job in the two markets of Israel and France. Hu Fengju told this reporter that Yutong’s market share in Israel can account for 30%, and the French market has also developed well this year. “The sales volume in the previous year was only a few units, a dozen units, and more than 100 units were sold this year.”

For other markets in Europe, Hu Fengju said that they are advancing. "This mainly depends on our ability to keep up with our services." At present, Yutong’s entire overseas business unit has more than 500 employees, including half of its service personnel and 40% of its business staff.