Chinese car manufacturers take advantage of idle foreign-funded factories to expand globally with a lightweight asset approach.

Foreign Media: Chinese Auto Companies Leverage Idle Foreign-funded Factories for "Light Asset" Overseas Expansion, Accelerating Global Expansion

Faced with the dual pressures of overcapacity and weak demand domestically, Chinese auto companies such as Great Wall Motor and Geely Auto are adopting a "light asset" strategy, using idle factories abandoned by international automakers overseas to assemble vehicles, thus expanding their global footprint at a lower cost.

Great Wall Motor is in talks with Mercedes-Benz to jointly use the factory located in the port city of East London, South Africa, owned by Mercedes-Benz; just under two months ago, China's state-owned automaker Chery Automobile had already reached an agreement to take over the manufacturing assets of Nissan Motor in Roslin, an area on the outskirts of Pretoria, South Africa.

Considering profitability, geopolitical factors, and operational risks, Chinese automakers tend to avoid building their own factories overseas. The widespread overcapacity in the global automotive industry has provided them with an opportunity to accelerate their overseas expansion.

Original article: toutiao.com/article/1859741179074760/

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