Big hand! Geely plans to invest $10 billion in Malaysia! Build the largest automobile city in the region

　　China car companies are accelerating their entry into the Southeast Asian market.

　　According to the Malaysian National News Agency, Geely, a China automobile manufacturer, will invest 10 billion US dollars to turn Tanjung Malin, Perak, Malaysia into the largest automobile city in the region. Malaysian Prime Minister Anwar bin Ibrahim said that Geely conveyed this plan to him in a letter, and this investment will create thousands of jobs in Malaysia.

　　Actually,It has been laid out in Malaysia for a long time. In 2017, Zhejiang Holding Group acquired a 49.9% stake in Proton Automobile, Malaysia’s "national automobile brand", which promoted Proton Automobile to become a profitable enterprise in the past three years from an enterprise with an annual loss of nearly 2 billion.

　　Behind the plan to build a "motor city" in Malaysia, it is also a new stage for China car companies to go to sea. Zhang Xiaorong, president of the Institute of Deep Science and Technology, said in an interview: "Now it is the initial stage of China’s automobile export, and in the future it will be transferred to the stage of investing in production and developing industrial chain in local countries."

　　Geely has been deeply involved in Malaysia, and once went "two-way" with Proton.

　　According to reports, Geely plans to invest 10 billion US dollars to make Tanjung Malin, Perak, Malaysia the "largest automobile city" in the region.

　　Tanjung Malin is the location of Proton Automobile Factory, and Geely and Proton Automobile achieved "two-way trip" many years ago. In 2017, Geely Automobile and Malaysia DRB-HICOM Group formally signed an agreement, and Zhejiang Geely Automobile Holding Group acquired 49.9% shares of Proton Automobile, a subsidiary of DRB-HICOM Group, and Geely Automobile also became the exclusive foreign strategic partner of Proton Automobile.

　　China-ASEAN, which the reporter recently participated in.In the automobile industry cooperation forum, Wang Huaibing, CFO of Proton Automobile, said that Geely held hands with Proton Automobile to lay out Southeast Asia and chose one.Machine. Catch up with the country "At that time, the launch of Geely Automobile 3.0 also promoted the upgrading of China automobile industry, which laid a good foundation for Proton’s subsequent success.

　　According to Wang Huaibing, Proton Automobile was founded in 1983 by Malaysian Prime Minister Mahathir at that time and has a history of 40 years. In 1985, Proton rolled off the assembly line with its first "SAGA" car. After that, Proton became the sales champion in Malaysia for 20 years. At the peak, its market share once reached 60%. It was a national car in Malaysia and a "national treasure brand". However, after many tests, Proton’s car sales once declined. By 2018, the entire market share once fell to 10%, ranking only the fourth in Malaysia.

　　In the early days of Geely Automobile’s shareholding in Proton, Proton Automobile faced the dilemma of "four highs, four lows and more than two". "Four highs" refers to high cost of spare parts, high loss, high product inventory and high personnel expenses; "Four lows" refers to low sales, low quality, low brand reputation and low staff morale; "Liangduo" refers to multi-race, culture, politics (Malays, Chinese, Indians) and multi-nature (state-owned enterprises, private enterprises, transnational joint ventures and private enterprises).

　　"Malaysia is a multi-ethnic cultural and political background. Proton is a state-owned enterprise in Malaysia, and Geely is a private enterprise. It is not easy for us to set up such a multinational joint venture. The situation of reform is quite complicated." Wang Huaibing said.

　　Wang Huaibing said that shortly after the establishment of the joint venture company, Proton Automobile set up eight cross-functional groups with about 200 participants, one of which was "How to solve the problem of the canteen". "This problem seems very small, but if the canteen is not improved well, how can we make a complicated car and improve the level of products and services? It is precisely by mobilizing local employees to find and solve problems together and promote problem-oriented reforms that we can unify our thinking and integrate Proton into Geely’s culture. " He said.

　　At present, Geely and Proton Automobile have achieved "win-win cooperation". According to reports, Proton’s automobile exports ranked first in Malaysia for two consecutive years and have been exported to 13 countries. In terms of price, the average selling price of Proton Motor increased by 34% from 2018 to 2022, and its brand awareness was improved. From a company with an annual loss of nearly 2 billion to a company that has achieved profitability in the past three years.

　　China car companies have increased their sales in Southeast Asia, and their sales have been "dominated"

　　Behind Geely Automobile’s accelerated layout of Malaysian market, China car companies are constantly increasing the Southeast Asian market.

　　On May 5, Vietnamese Vice Premier Chen Honghe met with him in Hanoi.Wang Chuanfu, Chairman of the Board of Directors, negotiated the contents related to electric vehicles. Wang Chuanfu hopes that Vietnam will provide "favorable conditions" for completing the investment process, so that electric vehicles can be quickly invested in Vietnam and sold in local and other markets in Southeast Asia.

　　In September 2022, the first overseas factory landed in Thailand, and it is expected to start operation in 2024. The planned annual output of this factory is 150,000 vehicles, which will radiate the entire ASEAN market. Besides BYD,We have established factories in Thailand and Indonesia,The Thai factory has been put into production for two years, and many China car companies have accelerated their influx into the Southeast Asian market.

　　Why do China car companies flood into Southeast Asia? Because their cars are selling like hot cakes in the Southeast Asian market. The relevant person in charge of BYD told reporters that in November 2022, BYD’s ATTO3 (Yuan PLUS) was listed in Thailand, which triggered local users to "snap up in the middle of the night".

　　Tang Zhimin, founding dean of the International College of Chia Tai School of Management in Thailand and director of China ASEAN Research Center, said that among the top five models of pure electric vehicles in Thailand in 2022, China brand occupied four seats, namely, Great Wall ORA Good Cat, MG EP and MG ZS EV of Chia Tai SAIC, and ATTO3 of BYD. In the first quarter of this year, the market share of BYD ATTO3 (pure electric) was as high as 37.5%, and the sales of Nezha V, ORA Good Cat and MG were also among the best.

　　Published by CanalysChina’s automobile export core areas are gradually shifting from "irregular areas" such as Africa, Central Asia and South Asia to "economically developed" and "automobile industry developed areas" such as Europe and Southeast Asia.

　　Canalys predicts that in the next 10 years, the overall automobile market in ASEAN will enter a period of rapid development. Although at this stage, NEV(New Energy Vehicle,The penetration rate is lower than other mainstream countries, but countries represented by Thailand and Vietnam have continuously introduced support policies for new energy industries and increased infrastructure investment. The combination of China-ASEAN Free Trade Area construction and RCEP and other favorable factors will further promote the penetration rate of China automobile products, especially new energy products, in the Southeast Asian market. It is estimated that by 2025, the penetration rate of China automobile products in Southeast Asia will increase rapidly from 2.6% in 2022 to 12.8%.

　　Entering the new stage of supply chain going to sea, facing the competition from Japanese and Korean car companies

　　Judging from the automobile export, China is already hitting the "No.1 in the world". According to the data of China Association of Automobile Manufacturers, China’s automobile exports continue to maintain rapid growth. In the first half of this year, automobile enterprises exported 2.14 million vehicles, up 75.7% year-on-year, and it is expected to become the world’s largest exporter this year.

　　However, the export data only reflects the strength of products going to sea. Compared with Japanese, Korean and European and American automobile giants setting up factories in various countries to promote "manufacturing going to sea", the progress of China automobile enterprises going to sea is still in the initial stage.

　　In the Southeast Asian market, Japanese car companies are facing strong competition from Japanese and Korean car companies. Wang Huaibing said that ASEAN is dominated by Japanese cars, accounting for about 80%. Because Japanese cars have been deeply cultivated in Southeast Asia for many years, they are supplied from upstream and downstream.A complete financial layout has a "monopoly position" on local industrial policies, including the ASEAN market.

　　At present, the automobile market in Southeast Asia is mainly occupied by Japanese cars such as Toyota and Korean car giants such as Hyundai and Kia. According to the data of Indonesia Association of Automobile Manufacturers, in 2022, the sales volume of cars in Indonesia exceeded 1.01 million, of which Japanese cars accounted for 92% of the market share, and Toyota ranked first with sales volume of 329,500. According to the data of Vietnam Automobile Manufacturers Association, in 2022, the top five brands among its member companies were Toyota, Hyundai, Kia, Mitsubishi and Mazda, all of which were Japanese and Korean car companies.

　　"At present, China has only surpassed Japan in terms of the number of automobile exports, but there is still a considerable gap between China brand and Japanese cars in terms of global sales of Japanese cars under full-scale statistics. Japanese brands still have strong local advantages in global layout of industrial chain, regional guarantee of supply chain, sales strategy and channel innovation. " Independent international strategyChen Jia said in an interview with reporters.

　　Wang Huaibing said: "The internationalization of China enterprises can be divided into three stages: going out, going in and going up. Going out is very simple. As long as you have products and technology, you can find an agent locally. But this kind of going out is also easy to’ walk back’ and has no foundation. Going in’ means not only having products and technology, but also having management and culture to go out to sea. For example, Geely’s hand in hand with Proton is a model of finding partners in the local area to fully "go in". In addition to the above-mentioned elements,’ going up’ must have brand and local manufacturing R&D capabilities, which is also an international trilogy. "

　　"China enterprises going out to sea, upgrading from the original simple trade in goods to the output of the whole value chain of industrial chain and supply chain, should be the general trend of future development." Wang Huaibing said.

　　Chen Jia believes: "Geely’s construction of a $10 billion automobile city in Malaysia is definitely a major event for China car companies to go to sea, but there is still a long way to go to truly become a benchmark for China car companies to go to sea in a new stage. In addition to huge investment, Geely also needs to develop a new industrial chain mode, a new global supply chain network, a new operating cost control system and a localized marketing network system. "