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July 1st will become China's commercial vehicle export to Russia. If it fails to meet Russia's new 55 quality standard certification, Chinese commercial vehicles will not be able to export to Russia. At the same time, according to the data from the Ministry of Commerce, in the first quarter of this year, the total number of exported auto vehicles at the Manzhouli port in Inner Mongolia was 1,316, which was a significant drop from the same period of last year.
Compared to the boom of China’s commercial vehicle exports to Russia in 2007, commercial vehicle exports to Russia have become deserted in the first quarter of 2008. Is the demand for commercial vehicles in Russia reduced? Or is the Russian government increasingly restricting the export of commercial vehicles in China? In the case of increasingly difficult exports, should companies go to Russia to build factories?
In response, officials from the government, foreign trade companies, and commercial vehicle companies learned that when Russia's import certification regulations become more stringent, building a plant in Russia may not be the most effective method.
The obstacle to export is the company itself
It is understood that the Technical Supervision Agency of the Russian Federation and the Institute of Automotive and Automotive Engines jointly developed the "Regulations on Adjusting the Dissemination Procedure of Automobile Quality Inspection Certificates." The new plan will take effect on July 1, 2008. The adjustment will cancel the qualifications for the simplified procedures for the issuance of imported Chinese automobile inspection certificates.
In this regard, the Director of the Russian Department of the European Division of the Ministry of Commerce told the reporter that from the current situation, Russia holds a certain degree of rejection of Chinese auto exports. Chinese auto companies mainly sell mid-to-low-end models in Russia, and they are basically the same as the consumer groups of Russian auto manufacturers, which will inevitably have a significant impact on the auto industry in the country and affect the sales of its local auto brands. Therefore, from the beginning of last year to the present, Russia has increasingly stringent requirements for the certification of imported cars, and the local government will set certain technical barriers to limit the development of foreign automobile companies in the local area.
Zhu Jingcheng, chairman of Xibili Automobile Export Co., Ltd. (a professional automotive export company for Russia, the Commonwealth of Independent States, and Eastern European countries), disagreed with the Russian government’s perception of China’s resistance.
Zhu Jingcheng said that because Russia is in line with Europe in terms of technology and emission standards, most of the products imported by China before the export of commercial vehicles to Russia come from Europe, the United States or Japan and South Korea. "Because European, American, Japanese and Korean commercial vehicles have already reached Russia's own requirements in terms of technology and emission standards, their products will be unimpeded when exported to Russia."
Zhu Jingcheng told reporters that the biggest obstacle to China’s commercial vehicle exports to Russia is not in Russia but in the Chinese auto companies themselves. The technical level of commercial vehicles in China is not in line with international standards. In addition, the level of China’s certification is inconsistent with international standards, which will inevitably lead to difficulties in exporting. According to the requirements of the "Geneva Accord" (signed in 1958), buses with more than 8 meters must have two doors, but many Chinese buses with more than 8 meters that are exported to Russia have only one door, and the size of the safety escape window has not yet reached. Claim. During the inspection process, it was also found that 90% of buses exported to Russia failed in safety performance.
For instance, Zhu Jingcheng stated that the company has been helping Wuzhou Dragon to export to Russia for certification, but this process has been very difficult and has finally given up.
“The Russian market is huge. By 2010, Russia’s demand for imported cars will reach 1 million. When China’s commercial vehicle companies want to enter Russia, it’s not just what the other party should do and how the market should change. It’s that It is necessary to enhance competitiveness by improving the level of its own technology, services, and spare parts supply." Zhu Jingcheng said.
Overseas plants need to wait for opportunities
In the increasingly difficult case of export to Russia, should companies go overseas to build factories?
The reporter learned from the Russian Department of the European Division of the Ministry of Commerce that there has been some problems in the establishment of Chinese auto companies' joint ventures in Russia and joint ventures with local companies. The application has not been approved, and Chinese auto companies need to go overseas to build factories. Wait for the opportunity.
Zhu Jingcheng also told reporters that the reality in Russia is that for the industrial assembly project under the Russian 166 document, the government grants preferential tax exemption for imported spare parts. However, if the approval of industrial assembly is not obtained, the assembly of parts will be taxed as a whole. In this way, plus the cost of assembly in Russia, the cost of the non-industrial assembly project will be 20% higher than the cost of imported vehicles. It seems that there is no market for assembled cars under non-industrial assembly projects in Russia.
Zhu Jingcheng introduced that at the beginning of 2006, the Russian Ministry of Economic Development and Trade had taken the initiative to invite the world’s top ten auto companies to negotiate the construction of a plant in Russia. Unfortunately, Chinese auto companies were not invited to participate. So far, none of the Chinese auto companies have received approvals for industrial assembly under the Russian 166 document. In other words, all Chinese auto assembly projects are not Russian-approved industrial assembly projects. "There is a huge risk for Chinese auto companies investing in Russia's assembly plants. It is a serious point. This is a no return."
At the same time, the reporter learned from Zhu Yuanbing, Yutong’s Overseas Markets Department, that Yutong is not currently building a plant in Russia. The reason is that according to the comprehensive assessment, the quantity of Yutong’s exports to Russia is currently insufficient to support its construction costs in Russia; and the Russian supporting system is not perfect, for example, the matching of interior products is less, so it is necessary to import to meet this part. The demand, coupled with Russia’s high labor costs and high commodity prices, are also some of the current difficulties to overcome.
Zhu Yuanbing told reporters that Yutong is currently adopting a two-step strategy for exports to Russia: The first step is to build a central library of spare parts and do a good job in the post-sale and maintenance services of Yutong buses in Russia. At present, Yutong has a special parts transfer warehouse in Russia. However, with the increase in sales volume and the increase in customer demand for after-sales services, it has become an urgent need to establish a central library of parts. In the second step, when Yutong’s sales volume in Russia reaches a certain amount, the company will consider expanding sales through joint ventures, CKD, etc.
View related topics: Commercial Vehicle Export Analysis
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