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Editor's note: On December 12-14, the chief editor of China Automotive News Xing Wenjun hosted the first “Truck Passenger Car World Forum†held in Lyon, France, and hosted a panel discussion on the heavy vehicle market in China and India. An Qingheng, deputy general manager of Dongfeng Commercial Vehicle Co., Ltd. Huang Gang, general manager of Jianghuai Automobile International Co., Ltd. Miao Cairong, senior vice president of Renault Truck International, Emmanuel Levacher, and Rajinder Malhan, director of the international department of Indian Akok Leland Truck Company, were invited to attend the meeting and delivered speeches. The following is an interview with the editor-in-chief of Xing Wenjun during the meeting.
China Automotive News (CBU for short): Compared with last year, how is the overall status of JAC International's exports this year?
Yan Cairong: In 2007, Jianghuai’s exports were mainly commercial vehicles, which was 130% longer than in 2006 and should be said to have more than doubled. In terms of sales revenue, the growth rate is even greater. In 2006, it was the appearance of 50 million US dollars. In 2007, it should be more than 1.5 billion, but it actually quadrupled. In addition, there are new changes in the commodity structure, which is also dominated by commercial vehicles, and heavy trucks. This is a relatively new sector of JAC this year. In 2007, it had a good performance.
Last year (2006) was not exported. The number of heavy trucks we can export this year can reach 1,000. Domestic sales of heavy trucks range from 9,000 units to 10,000 units.
CBU: When did JAC start to make heavy trucks?
Zhai Cairong: JAC really started to make heavy trucks. That is, it is actually only two years since the batch was put on the market, starting from 2005.
CBU: What percentage of heavy trucks are in exports? How big is the 1,000 units in that 150 million?
Yan Cairong: Exports account for a relatively high percentage of exports. The unit price of this thousand vehicles should be between 20 and 250,000 yuan, and the total amount of 1,000 units is 250 million yuan, which is nearly 10 million dollars, which is 30 percent of the 150 million. Including a full range of heavy trucks, including tractors, dump trucks, and more.
Another feature we have this year is that although the overall exports are mainly based on commercial vehicles, our SUVs and MPVs have begun to be used as prototypes in many countries. There is a market test stage for prototype vehicles, and products are improved based on consumer reactions after market testing. The product certification in the country where it is located can be synchronized. We strictly follow this procedure. The advantage of doing so is that we can choose the right products and suitable partners. Both of these are important.
CBU: Your prototype can be given to several partners?
Yan Cairong: There can be many models for prototype vehicles. They can be tested like light trucks first. They are not necessarily sold first. Finally, we discuss conditions with dealers to see if we can cooperate further. We choose excellent partners. The other way is through the show, we take the product to show it, this way is still very effective.
CBU: Are your current export forms exclusive?
Yan Cairong: It is different. If it is a key market, if we choose a very good partner, it is certainly exclusive. Because if not exclusive, the other party will also worry about the operational risk. The export market of JAC and China's commercial vehicles as a whole is in line with the export market. The Asian region is mainly concentrated in Southeast Asia. There are also some areas in Central Europe and the Gulf. Africa, which is mainly based in North Africa, is now expanding to other oil-producing countries. The demand in these areas is very strong. The European part is mainly in Eastern Europe, Ukraine and Russia. There is South America,
CBU: Did JAC have its own personnel in these major export markets or did it use agency?
Yan Cairong: We are now slowly taking control of these markets, gradually making such attempts, such as sending people to stay.
CBU: What kind of plan will Jianghuai have for export next year?
Yan Cairong: Our plan for next year will be around 28,000 units. Sales revenue will reach nearly 250 million in U.S. dollars.
CBU: Is it possible for Bin Yue to go out?
Ruan Cairong: As soon as this product comes up, we will target both domestic and international markets. Therefore, we must certainly develop abroad. In fact, we now have a very important order. Details We are still negotiating between the two sides, about 1,000 units, exported to developing countries.
CBU: When will JAC's commercial vehicles and passenger vehicles enter the European and American developed markets?
Yan Cairong: Chinese enterprises should rationally view the markets of developed countries. It is precisely because it is a well-developed and very important market. Breakthroughs certainly mean fierce competition. Chinese enterprises must make sufficient preparations to enter the markets of developed countries. For example, the EU, if it enters a specific country through a certain method, can only sell in this particular country. I don't think it has the benchmark significance of entering the EU market generally. Considering this standard, our country still needs to make many preparations. It may take a year or even several years.
CBU: In other words, although Bin Yue used Italian design, you also have R&D centers there, but does the design meet the latest two EU provisions, one for pedestrian safety protection and one for vehicle scrap standards?
Yan Cairong: No one can make such a conclusion before completing a formal test experiment. Whether or not the design is actually considered and whether it can be achieved is two concepts. Many of the things we do are done according to very high standards, but the question is whether it can be achieved and it has to be something else.
CBU: Now that Chinese companies are exporting, where is the core competitiveness of JAC products?
Yan Cairong: One of the common features of domestic and international markets is to sell the right products to the most suitable customers. The basic laws of the market are all the same. The things that benefit the market and some of the success factors should be preserved in the international market. Characteristics and commonalities should be combined. JAC's success in China I think there are several main points: First of all, we must carefully analyze and understand the market, that is, accurately grasp the needs of customers, this is the most fundamental point. The second is to always insist on the competitiveness of technology, which means that we are pursuing quality and efficiency. In the international market, everybody thinks that Chinese products are very low in price first, but the price is low to a certain extent, it will inevitably bring about the decline of product quality, and we must grasp this aspect well. Give full attention to partners, strengthen communication and coordination.
CBU: At home, Jianghuai's products are more expensive than similar products. Some of them may be three or four thousand dollars more expensive than the same type of vehicles. Why?
Yan Cairong: In the domestic market, the price per car is about 10% higher than that of similar products. Why is JAC's truck successful? The first is the chassis of our bus. In the same product, consumers have higher requirements for passenger car products than trucks. The second is that consumers have higher expectations for after-sales services. The word bus is a city, a company, a line. In these terms, the chassis of the bus is much better than the truck chassis.
CBU: In China, the agricultural vehicle market is very large. There are between 2 million and 3 million annual sales and sales, including three rounds and four rounds. You will definitely not do it in three rounds. Then do you think that the four-wheeled vehicles should be used for the sake of rural users?
Yan Cairong: Yes. This kind of car is now called an economical light truck and we are doing it, and we will stick to the idea of ​​producing and selling standard light trucks. First of all, we must ensure quality, and we must also build our competitiveness in terms of price.
CBU: In terms of passenger vehicles, including your MPVs, SUVs, and bin sedans, what kind of market pressure does JAC face?
Yan Cairong: The passenger car market is a very competitive and very mature market. Especially if we want to enter the more rational and mature markets in Europe and the United States, it will face several pressures, including quality, service, and value. In Europe, Korean cars are still cheaper than other local cars. Chinese cars have to enter the European market and their prices are more competitive than their cars. This requires a lot of work. The reason why Japan and South Korea's cars are relatively competitive is because of the relatively high economic scale. China's cars have not reached this point yet.
CBU: For many years, Jianghuai has not had a joint venture. It is a state-owned enterprise. According to common sense, it is not as flexible as the operating mechanism of private enterprises. Jianghuai is able to maintain a growth rate of 40 percent per year depending on its strength.
Yan Cairong: State-owned enterprises also have advantages over private companies. Our employees in Jianghuai work together and they all have a sense of belonging. This is more difficult to achieve in private companies. This is related to corporate culture. First, the development process of each of our employees, his efforts will be reflected in the value. The second is that in the continuous development of the company, our results are shared by employees. Employees stay in our environment for a period of time. They will not be used to them when they come out because I think our system is more advanced and employees leave less. In fact, Jianghuai's operating mechanism can be adjusted very flexibly, so that the company has a very large operating space. Third, our local government is very supportive of us.