Create "Three Steps" for International Aircraft Carrier ZTE Overseas Sales
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North China Auto Car Co., Ltd.: Chen Zenghua, executive deputy general manager of ZTE Corporation, said recently that ZTE’s goal in the future is to go out and fight for exports and domestic sales will each account for 50%. The ultimate goal is to build factories abroad. The industry believes that ZTE's development model is the third road to the Chinese automotive industry that is facing a heavy pressure. Next year, production capacity will reach 200,000 vehicles in three places. According to Chen Zhenhua, currently, ZTE has three automobile manufacturing plants, which are the Zhongxing passenger car manufacturing plant with an annual production capacity of 20,000 vehicles and the Zhongxing automobile factory with an annual production capacity of 60,000 vehicles. In the past year, Jiangxi Fuqi Plant, which was reorganized under the debt-taking method, was acquired. At present, Jiangxi Fuqi is building a new plant. After the new plant is put into operation, the production capacity of Jiangxi Fuqi will reach 100,000 units. By the end of this year, the production capacity of two production bases in Baoding will also reach 100,000 vehicles. In addition to the three production bases, ZTE has an R&D center, which is located in Beijing Zhongxing Tianye Automotive Technology Co., Ltd. It is reported that the Chiye 2400, which was listed before the opening of the Beijing International Motor Vehicles in June, was developed by the R&D center. Chen Zhenhua said that this year, ZTE Corporation plans to invest 340 million yuan to develop two new models. According to Zhou Zhidong, general manager of sales company of Zhongxing Fuqi Co., Ltd., the company will also launch a CSV car next year. This is a brand new commercial vehicle. The Great Wall opened for ZTE's listing. At the end of last year, the Great Wall Motors, a privately-owned auto company, was listed in Hong Kong. Since the Great Wall and ZTE are both from Baoding and both have the same private attributes, ZTE’s intention to go public has become a topic of concern in the industry. Chen Zhenhua said that listing should be cautious. At present, the company still uses bank loans. However, he admitted that the successful listing of the Great Wall is a good thing for ZTE, at least let everyone know that private auto companies are recognized by everyone in the world, but also pave the way for ZTE's future listing in Hong Kong or Singapore. Chen Zhenhua said that at the right time, ZTE will take the road to listing. Next year, overseas rebuilt several CKD factories. Last year, 7136 vehicles were exported by Zhongxing, becoming the first place in China's overseas sales of automobiles. Chen Zhenhua said that "ZTE's development goal is to go abroad and build factories overseas." According to Chen Zhenhua, ZTE has adopted a "three-step" strategy in overseas sales: First, it has improved its marketing service network and achieved export sales of vehicles. At present, ZTE's exports are concentrated in the Middle East, North Africa, South America, and Russia. From January to May this year, ZTE accumulated nearly 4,000 vehicles and signed 2,000 orders in May. As for the export target for this year, Chen Zhenhua did not answer specific figures and said only that this year he hopes to exceed last year. The second step is to assemble parts overseas in CKD or SKD. Chen said that the establishment of CKD and SKD assembly plants overseas is a high-tariff area. For example, in Vietnam, the import tariff for finished vehicles is as high as 150%, while the part tariff is 20%. From January to May this year, ZTE's CKD parts have reached 600 units. At present, the company plans to build 4-5 CKD factories by 2005, in addition to CKD factories in Turkey, Egypt and Vietnam. The third step is to establish factories overseas. This is also the ultimate goal of ZTE's development. Chen said: "This is a long-term plan and I hope to complete it in 5-10 years." Relevant persons pointed out that as the auto giants of various countries fly over China, domestic SMEs and independent brands are facing cooperation with foreign auto companies to become the other side's production base, or the destiny of large-group mergers and acquisitions to lose autonomy. ZTE’s insistence on developing its own brands and vigorously exploring the development model of overseas markets actually indicated the third way for domestic SMEs. Source: Northern Network