BAIC driven to succeed

Dong Haiyang, president of BAIC International. Photo: Courtesy of BAIC International

One year after establishing its international division, automaker the BAIC Group is furthering its global expansion by consolidating sales channels, spearheading market promotion and sourcing local dealers in new markets.

Dong Haiyang, president of BAIC International under the BAIC Group, has attended many meetings and conferences with large and small partners over recent months to discuss internationalization. The company has signed cooperative agreements with 18 distributors, established 18 sales networks and opened up a 4S store, so named for its "sales, service, spare parts and survey." All these moves over the past year reflect the optimistic direction BAIC International is heading as it steps up its quest to "go global."

Dong assumed the top post of BAIC International in June 2013. Over the past year he has witnessed the company grow from just one person to include more than 300 staff members today. Sales have also soared at a similar rate. As of November 2013, BAIC International had sold 7,575 vehicles and recorded 1.9 billion yuan ($304 million) in gross revenue.

BAIC International aims to sign contracts with 20 overseas distributors, open 70 overseas dealerships, sell 20,000 vehicles and post 2.4 billion yuan in gross revenue all by December 2014.

By 2020, the company has set an overseas vehicles sales target of 400,000, accounting for target revenue worth 50 billion yuan.

In early 2013, the China Association of Automobile Manufacturers released a report that found the country's auto export industry was in decline. In the first quarter of 2013, the total amount of exported autos was 209,000, down 7.8 percent year-on-year and with no signs of rebounding in 2014.

These bleak prospects have only served to reinforce Dong's determination to speed up growth abroad.

"China's auto industry is currently producing around 40 million cars per year, with 23 million of these sold domestically and the rest to be exported overseas," said Dong, adding that the Chinese auto market cannot expand forever.

To better hit its growth targets, BAIC International has narrowed its focus on Brazil, Russia, Mexico, South Africa, Indonesia and Turkey. The company plans to open manufacturing bases and operational centers in each of these countries.

In choosing these target markets, BAIC International assessed the auto market growth rate, major types of cars preferred by consumers and standard market regulation.

"There are still gaps for us to close as we pivot from a multinational to international company," said Dong. "We have to be specific on our targets from the start."

Overseeing six target markets might seem like a headache for any company, but BAIC International has adjusted seamlessly to the transition.

In two of its markets, Indonesia and South Africa, steering wheels must be on the right unlike Chinese vehicles. Some markets require cars able to withstand high or low temperatures, requiring windscreen-defrosting or seat-warming functions.

"Different countries have different requirements for cars, which we must cater to via redevelopment to meeting these special needs," Dong said.

To better serve its markets, Dong has assembled a strong, diverse team with vast experience in the auto industry to achieve the company's goals. BAIC International's human resource director is from Audi, its brand consultant is from Volkswagen and its after-sales service provider is from Mercedes-Benz. All form an invaluable part of the company's talented team.

However, Dong knows that a company's biggest selling point is not its strong leadership but its products and service. "There are 'price buyers' and 'brand buyers' in the auto market, but our brand is at ground-zero in the international market," said Dong. "Therefore, our focus is to provide the best service in local markets."

To provide this high level of service, BAIC International employs skillful mechanics and boasts a stellar range of spare parts at each of its service centers.

As the company continues on the road to internationalization, Dong acknowledges that his team still has a long way to go.

"If your brand cannot differentiate itself from competitors, it can never be remembered and therefore has no margin for price," said Dong.