Today export and innovation are the major driving forces for Lifan. Russia is a key country in the normal side of “B & R”, one of the single national markets with the biggest market scale and potential and also one of deep cooperator of China along the “B & R”. So, Lifan casts its sight to Russia. Sun Zejun told the reporter, “Russia is a traditional export market for China with large population base and the correspondingly huge market demands. Russia was a developed market, now owning 50 million units of vehicles, i.e. 317 units/1,000 people. But these cars have been used for a long time and need replacement, so it makes great attractiveness to Lifan. From the view of global economic strength, the Russian market is in the world’s top ten with a wealth of resource and its strong development potential should not be ignored.”
Impacted by Russian policies and the depreciation of rubles, Chinese car brands in Russia have been impacted to some extent, but it is surprising that the best seller of Chinese brands in this country is Lifan. For instance, two SUV models including micro-sized SUV Lifan X50 and X60 are in the sale volume rank of single models. In 2016, Lifan’s overall market share accounted for 1.21% in the case of Chinese brands had overall share of 2.29% only. This figure is very impressive.
Behind this achievement, the strategic technologies of Lifan for overseas market exploitation should be mentioned here. According to Sun Zejun, since entering in Russia in 2007, Lifan has set up a subsidiary company in Russia, establishing a KD factory and building a complete set of sales and after-sales service system. In products, brands, services, technology, talent, localization, capital, finance and many other respects, Lifan provides excellent solutions to dealers and end consumers. Sun Zejun said: “We know what kind of cars consumers like and want, so we are close to the market for product development and improvement. In addition to the nice appearance, good price, rich configurations, quality and stability, in recent years, Chinese auto makers have begun to pay great attention to the perfection of the aftermarket system. Overseas consumers of Chinese cars can enjoy great local after-sales service, including 5 years/150,000 km warranty and a completed supply system. The closed-loop from product to after-sales service makes consumers more confident in the products made in China. Lifan not only has KD (spare parts) factory in many countries, but also sets many spare parts warehouses, so we get the trust of consumers.”
Russia is a successful case for Lifan’s work in exploitation of overseas markets, however, looking back to the past, the major difficulties and challenges were non-ignorable.
Sun Zejun frankly said that the current technical barriers and trade barriers are the biggest challenges for Lifan in overseas business, so, Lifan invested a lot of money in export product certification every year. “Too high and unequal tariff policy hinders the export of Chinese products. As the early inadequate understanding and research on the market, Lifan team had less knowledge about many local laws, customs and others so that early work is very difficult. With increasingly deep understanding on markets and more and more experienced Lifan-dispatched overseas staff, these challenges have been gradually resolved.”
Secondly, exchange rate fluctuations also affect the export of the entire automotive industry. To deal with this problem, Lifan overseas team works closely with local customers with the flexibility to develop a corresponding solution model, or even imports local products to impact the exchange rate.
“‘Go to global’ is in company with the risk. This requires us to be flexible and sharp enough to see the change of the market.” Sun said.
Today, with the sales network all over the world, Lifan has exported products to over 70 countries and regions in the world under over 500 market networks. Lifan products have been off line in seven KD plants in Russia, Azerbaijan, Myanmar, Iran, Ethiopia, Uruguay and Iraq respectively. It is especially worth mentioning that, in 2016, Lifan was ranking the fourth in terms of export volume among Chinese independent auto brands and the first in Chongqing.
As to the future, Sun said, Lifan will increase the input in products, marketing, network, after-sales service and other aspects and consolidate the foundation in the traditional markets including Russia and Iran to prepare for the further warm-up of the market while strengthening exploitation of the blank markets. For example, it is working to enter the European and American markets. In addition, some new models will be brought overseas. “In the past two years, we have launched a variety of 7-seat cars such as X7, X80, M7 and the new facelift X60, which have received a high evaluation of consumers at home and abroad through media. We intend to start the official launch of these models overseas in second half of this year.” Sun Zejun said.