Great Wall Motor and its presence in Latin America

Jue, 10/26/2023 - 13:55 -- bacosta

The first decade of this century brought with it a global restructuring of automobile production as China overtook the United States in 2008 and the European Union in 2010. The vast production of the Asian country's manufacturers is not only due to government incentives but also to a growing national and international demand derived from the price-quality ratio of its vehicles. This article analyses the ever-increasing presence of one of Latin America's most critical Chinese brands.

In 2000 America and Europe accounted for 68.7% of the world's car production. However, by 2022, this had decreased to 39.96%. On the other hand, Asia-Oceania went from 30.75% to 58.84%. According to OICA data, between 2000 and 2022, car production in China grew by approximately 1205.93%. In 2023, and according to CAAM data, during the January-July period, car production had an average growth rate of 8.26% (with negative rates in April and July) and a total output of 13,384,000 vehicles.

Revenues of Chinese automotive companies 2022 (CNY )[1]
SAIC MOTOR 757 billion CNY
BYD 139 billion CNY
FAW 108 billion CNY
CHANGAN 97 billion CNY
Source: OBELA with Firmsworld data

SAIC MOTOR and BYD are currently the most prominent Chinese automotive companies. They not only produce traditional vehicles but are also active in producing NEVs. However, other companies such as FAW and CHANGAN are also prominent. In this context, Great Wall Motors's holding company has positioned itself as the number ten in China. It was established in 1984 and produced its first car in 1990. It has four brands: HAVAL, WEY, ORA and GWM Pickup.

Its market covers over 60 countries and is in over 400 cities worldwide. However, internally, it has eight technology research centres.[2] ; two in Europe, five in Asia and one in North America. Moreover, it has twelve factories worldwide, seven of which are in the Asian giant; the others are in Malaysia, Tunisia, Russia, Bulgaria and Ecuador.

The name of the Great Wall assembly plant in Ecuador is CIAUTO, and it has been in operation since 2013. "More than 200 permanent employees and a large number of external suppliers work in this plant, generating a large number of jobs for the country; to date, more than 20,000 cars have been manufactured, conquering goals in the national industry". Ambacar.

The year of arrival of Great Wall Motors in various Latin American countries began in Costa Rica in 2003, followed by Guatemala in 2005, Peru and Paraguay in 2006, Chile in 2007 and Bolivia in 2009. Finally, Ecuador, Argentina and Mexico arrived in 2015, 2018 and 2023, respectively.

Chinese car brands in Mexico JAN-AUG 2023
Brands Quantity % of total
MG Motor 35322 4.12%
Chirey 18515 2.16%
JAC 12840 1.50%
Omoda 7659 0.89%
MOTORNATION 6208 0.72%
Total 80544 9.39%
Source: OBELA with data from INEGI

For some years now, an increase in the popularity of Chinese cars has characterised the Mexican automotive market. Of the 857,803 units sold from January to August 2023, 65.84% are imported (564,848 units). Of this percentage, 29.42% of imports come from China. In the same period but in 2005, INEGI's Administrative Register of the light vehicle automotive industry does not include any Chinese brands; however, in 2023, five Chinese brands (not counting Volvo, which has Chinese capital) had 9.39% of the market.

In this context, BBVA Mexico has agreed with Great Wall Motor for the former to grant loans of twelve to seventy-two months for purchasing a vehicle belonging to the GWM family to consumers who do not have a credit history and with down payments of up to 5%. The financial institution is first in automotive lending and will increase its market share from 24% to 26%. In this context, we find that the European Union initiated an investigation into Chinese vehicles for allegedly subsidising vehicle production; this aims at protecting the local automotive sector from a wave of "cheap" imports.

Finally, it purchased a factory from Mercedes-Benz in Iracemápolis, Brazil. The same company, with an additional production capacity of 100,000 vehicles, is expected to come on stream in the second half of 2023 and to generate hybrid and electric-only units for sales in 2024.

The success of Chinese vehicles in Latin America is not only due to the price-quality ratio but also to the elaborate sales strategies. On the other hand, the union of banking entities with GWM is a starting point to redefine and incentivise car loans in Mexico and the rest of the Latin American region. It shows a growing presence of Chinese brands in the automotive sector in Latin America and the displacement of the US and European industries with a grand marketing strategy.





[1] Yuan

[2] Europe: Germany and Austria; Asia: China, Korea, India and Japan; and North America: the United States.

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Tema de investigación: 
Integración y comercio