The new forces of Chinese car manufacturing are accelerating their overseas market layout.
Recently, foreign media reported that Stellantis Group is considering producing pure electric models under the Zero Run car brand at the Mirafiori factory in Italy, with a planned annual production of 150000 vehicles. The earliest production date is 2026 or 2027.
"If there are sufficient business reasons, Stellantis can manufacture Zero Run cars in Italy," said Tang Weishi, CEO of Stellantis, at the annual report communication meeting.
Regarding this, a reporter from the Daily Economic News asked Zero Run Automobile for confirmation, and the other party said, "Currently, discussions on various business cooperation between the two sides are still ongoing."
Zero Run's overseas production will rely on Stellantis or third parties
Public information shows that the Mirafiori factory located in Turin, Italy is currently mainly producing Fiat 500e and Maserati models. It is the production center of Stellantis Group's electric vehicles, with an annual production capacity of up to 600000 vehicles. In 2021, Stellantis Group renovated and upgraded its factory, and stated that it will allocate more electrified production tasks to the factory in the future.
It is worth mentioning that according to European automotive news reports, some models produced by the Mirafiori factory will end production in the future, which may provide space for the production of Zero Run automotive products.
Compared to this still under consideration production plan, it has been confirmed that Zero Run Motors will enter overseas markets through export this year. Last October, Zero Run Motors and Stellantis Group announced the establishment of a joint venture called Zero Run International with a 49% and 51% equity stake.
Zero Run Automotive stated that the joint venture company plans to exclusively export and sell its products to other global markets, as well as manufacture Zero Run automotive products locally, except for the Greater China region. The joint venture company plans to start exporting its products to the outside world in the second half of 2024.
According to the cooperation agreement, Zero Run Motors will directly have the complete empowerment of Stellantis Group's global automotive supply chain, sales channels, and after-sales service. The first model C10 will be delivered in markets such as Germany, France, Italy, and Spain, and other European countries will also be launched simultaneously. In the next two years, Zero Run Motors will simultaneously launch five models in Europe, Asia Pacific, the Middle East, the Americas and other regions.
Wu Qiang, Co President of Zero Run Automobile, told reporters that in terms of export form, Zero Run Automobile will choose to export whole vehicles or produce locally based on economic costs. "Currently, the cost of exporting whole vehicles is relatively low.". He also stated that Zero Run Motors will not build factories overseas, and localized production will rely on Stellantis factories and third-party factories for OEM.
Zero Run Automobile believes that entering overseas markets may help it achieve profitability. "In terms of profitability, overseas markets are indeed a great hope," said Zhu Jiangming, founder, chairman, and CEO of Zero Run Motors, in a previous interview with reporters. "The company's rapid entry into overseas markets will also have significant benefits for improving gross profit margins.".
New forces in car manufacturing are accelerating their layout in overseas markets
At present, many new car making forces are expanding into overseas markets. For example, Nezha Motors has already laid out its presence in the Thai market, with one-third of its 2024 sales target coming from overseas markets; Xiaopeng Motors also recently announced a partnership with Ali&, a distributor group in the United Arab Emirates; Sons establishes cooperation and accelerates the layout of the Sea Going 2.0 strategy.
However, from the data, there is still significant room for improvement in the sales of new car manufacturers in overseas markets. For example, according to publicly available data, Xiaopeng Motors sold 754 vehicles in its overseas market in 2022; In 2023, in the Norwegian market with a penetration rate of 82% for pure electric vehicles, Xiaopeng Motors had an annual sales volume of only 766 vehicles, with a market share of 0.6%.
Similar to Xiaopeng Motors, NIO's sales performance in the European market is also not satisfactory. According to Eu EVs data, in 2023, NIO's sales in the European market were 2364 vehicles. Although the growth rate was significant, there was still a significant gap in sales compared to traditional car companies.
"We need to take a longer-term perspective on how to go abroad, how to land, and how to operate steadily. Don't rush to pursue how many cars to sell and how much pocket money to earn for now," Zhu Jiangming told reporters.
While new forces in the automotive industry are actively expanding into overseas markets, automobile exports have also seen more policy benefits. According to CCTV, on February 7th, the website of the Ministry of Commerce published the "Opinions of the Ministry of Commerce and 9 Other Units on Supporting the Healthy Development of New Energy Vehicle Trade Cooperation", which mainly proposed 18 policy measures from six aspects: improving international business capabilities and levels, improving the international logistics system, and strengthening financial support.
"The Ministry of Commerce has issued a document supporting the export of new energy vehicles, which is expected to contribute new elasticity overseas." Everbright Securities believes that under the clear policy guidance of China's development of new energy exports, domestic brands will strengthen their overseas market layout. Through the establishment of overseas research institutes, strengthening cooperation with local dealers according to local conditions, and localized production models, overseas consumers' awareness of domestic brands will be enhanced, The overseas market is expected to continue to contribute to the sales growth of independent new energy.