On November 12, LIFAN and Brilliance Auto signed a strategic cooperation agreement in Uruguay to jointly explore the South American market. The two sides will give full play to their respective advantages, conduct in-depth discussions and carry out cooperation in production, sales and other process, so as to promote the vigorous development of Chinese automobiles in South America and realize the sharing of production capacity between private enterprises and state-owned enterprises overseas.
At the signing ceremony, for government representatives, we have Polanski, vice president of Uruguay, Wang Gang, Chinese ambassador to Uruguay, Minister of labor of Uruguay Ernesto Murro, Minister of industry Guillermo Moncecchi, governor of the state of San José. And for the company representatives, there are Wang Yanhui, Vice chairman of LIFAN industry (group) co., LTD, Deng Xiaodan, vice president, Ren Yajun, vice president and chief engineer, Yan Bingzhe, party secretary and chairman of Brilliance Automobile group holding co., LTD, chief engineer Gao Weimin, general manager of international trading company Zhang Wei.
Relying on factory advantage, sharing overseas production capacity
According to the agreement, LIFAN will share the capacity of 18,000 vehicles with Brilliance Auto in three years with the advantage of our factories in Uruguay, among which 3,000 will be produced in the first year, 5,000 in the second year and 10,000 in the third year.
Uruguay and Chinese friendship has a long history, as the southernmost country on the "One Belt One Road" route, it is not only bounded by Brazil and Argentina which are the top two countries for South America car consumption, but also signed a bilateral agreement with them on cars, enjoying zero tariff export car policy. Advantaged geographical location, favorable auto industry policies and good business environment make Uruguay a bridgehead for Chinese cars to enter the South American market. And that's why LIFAN invested in Uruguay in 2012. In addition, with the advantage of building a factory in Uruguay to produce and assemble cars, LIFAN has achieved the goal of exporting to Brazil and Argentina with zero tariff, thereby covering the whole South American market.
Brilliance Auto's main export country in South America is Brazil. However, direct vehicle exports will cost a 35% tariff. After sharing the capacity with LIFAN, the finished vehicles will be regarded as Uruguayan products, which can be exported to Brazil tariff-free under the bilateral automobile agreement between Uruguay and Brazil.
Chinese brands have blossomed in South America through the "One Belt One Road" initiative
As the largest private import and export enterprise in Chongqing, LIFAN always insists on "going global" and actively responds to the "One Belt One Road" initiative. We have set up automobile and motorcycle production bases in more than 10 countries including Vietnam, Thailand, Russia, Ethiopia and Uruguay.
After years of painstaking efforts, LIFAN has achieved excellent results along the "One Belt One Road" route. It has been the Chinese automobile brand with the highest sales volume in the Russian market for 7 consecutive years, the Chinese domestic brand with the highest sales volume of new cars in the Ethiopian market for 8 consecutive years, and the car sales champion of the Brazilian market among Chinese automobile brands for 2 consecutive years.
Brilliance Auto is a well-known brand and main force in Chinese automobile industry. It owns three independent brands of "Zhonghua", "Jinbei" and "Huasong" as well as two joint-venture brands of "BMW Brilliance" and "Renault Brilliance". Its products cover the whole field of passenger vehicles and commercial vehicles. It has four listed companies, six vehicle manufacturers, four engine manufacturers and several parts manufacturers, and has factories in many countries along the "One Belt One Road" route.
This cooperation between LIFAN and Brilliance Automobile in Uruguay is not only a powerful witness for the two countries to jointly promote high-quality development under the initiative of "One Belt One Road", but also a precedent for Chinese private enterprises and state-owned enterprises to jointly explore overseas markets.
As Wang Yanhui said at the signing ceremony, in the past, Chinese products often showed a vicious competition in foreign countries, with LIFAN and Brilliance Auto reached this strategic cooperation in Uruguay, not only is a precedent of private enterprise and state-owned enterprises sharing the capacity in overseas, but more of a Chinese enterprises working together abroad and give full play to their respective advantages. It will ensure Chinese products to provide a better condition for the overseas customers.