Global times: OEMS should focus on quality, not price—— JD power
Chinese vehicle makers that hope to explore overseas markets shouldn't simply use a cheap-price strategy, but should instead focus on enhancing the quality of their products, representatives from JD Power, a US-based market research firm, said during a press conference in Shanghai on Thursday.
"Domestic companies should make sure that the quality of their products meets the average requirements of the market they target. Otherwise, they should delay the plan of overseas expansion," said Jacob George, vice president and general manager of JD Power's Asia-Pacific operations.
George cited the example of South Korea-based Hyundai Motor Co, noting that the company's cheap but low-quality products caused the brand to have difficulties for a long time in the US after a short period of initial success. He said it was not until the company's product quality picked up that its sales gradually improved in the US market.
"For Chinese brands, a big challenge is how to build brand awareness, as many overseas clients are still viewing Made-in-China products as being cheap and of low quality. How to shake off that impression is for Chinese original equipment manufacturers (OEMs) to find out," George told the Global Times.
A number of domestic car companies have already expressed an intention to explore overseas markets. For example, Hebei Province-based Great Wall Motor plans to acquire US-based automobile brand Jeep, according to media reports. George said that a number of domestic car companies have told JD Power about their plans for overseas expansion in the next few years, although he didn't elaborate.
According to George, the China-proposed "Belt and Road" initiative is also a stimulus for domestic OEMS to go global.
Domestic investors put about $170 billion into 7,961 overseas companies in 164 countries and regions in 2016, up 44.1 percent year-on-year, according to data from the Ministry of Commerce in January.