The turmoil in Libya continues. Chinese investment and related losses have gradually surfaced.
On the evening of March 1, 2011, China Railway Construction Co., Ltd. issued an announcement saying that the company has 3 project general contracting projects in Libya with a total contract value of 4.237 billion US dollars and has completed 686 million US dollars. Due to the uncertainty in the situation in Libya, there will be uncertainty regarding the preservation of equipment and materials at the project site and the subsequent progress. There will also be a certain amount of expenses for the company’s personnel to withdraw from Libya.
Similar to the China Railway Construction Corporation, there are 13 central SOEs regulated by the SASAC, including China Water Conservancy and Hydropower Construction Group, China Communications Construction Group, China Railway Construction Engineering Corporation, China State Construction Engineering Corporation and China Gezhouba Group Corporation. In addition, there are other Chinese-funded enterprises such as Huawei, Huafeng and Beijing Hongfu.
Commercial vehicles, especially heavy-duty trucks and special-purpose vehicles, have a large part of these large-scale infrastructure projects that have been won by the central enterprises in the West Asia and North Africa region. As an important market for commercial vehicle exports, the unstable situation in West Asia and North Africa will inevitably affect the exports of domestic commercial vehicle companies.
North Africa is a very important market for commercial vehicles in China. The volume of vehicle exports in this region accounts for a large part of the total exports of commercial vehicles in China. Countries such as Algeria, Egypt, Libya, and Sudan are all relatively more exporting countries, especially Algeria. Each year, China has the largest number of commercial vehicle exports.
Export business basically stopped
According to a related person from Dajinlong, the amount of Dajinlong light passengers exported to Egypt each year is not small, and it is generally used for short-distance passenger transportation or logistics. As of January 2011, 700 light passengers were exported to Egypt and the 700 vehicles had already been delivered. Affected by the current situation, the export business to Egypt has been suspended, so it is still affected. However, light passengers accounted for a relatively small proportion of Dajinlong's overseas business, so it did not have much impact on the overall situation. Contact with local dealers should be no problem. After all, the situation in Egypt is relatively stable.
Shaanxi Zhongqi's export business is mainly concentrated in North Africa, Middle East and other regions with more than zero-star exports. The operations in West Asia and North Africa account for approximately 50% of Shaanqi's overseas business. Shaanxi Automobile's exports to local products include heavy trucks, construction vehicles, etc. The marketing model covers the establishment of offices, the development of independent and non-independent distributors and other forms. Due to the recent tense situation, Shaanxi Automobile's business in the region has been suspended. The turmoil has a relatively small impact on local dealers. After all, they are natives.
According to the overseas business department of Hualing Automobile, Valin's large customers in Algeria, Morocco, Egypt, and Libya are relatively concentrated and generally export through two channels: through domestic large-scale infrastructure companies, such as China Construction, CNOOC, etc., to participate in bidding and obtain orders. Rely on local dealers to develop customers. Since January 2011, Valin has received a lot of orders. Some of these orders have not yet started, and some have been sent to the sea. Those who have not started can only be suspended. We have a batch of order vehicles now in Egypt and have not been able to find a boat to go to Libya. Everyone is afraid to go. Our local customers in Libya have not been able to contact, and Egypt sometimes has problems sometimes. Although Algeria is unstable, it is fortunate that basic economic activities are still proceeding normally. We have an order of nearly 3 million U.S. dollars in Algeria. The car was handed over in January and we recently received the acceptance bill provided by the other bank.
The market share of Zhongtong Bus in North Africa is about 20%~30%, mainly based on tourist bus exports. In the Middle East, it is mainly sold to six countries including Saudi Arabia, Iran and Dubai. The export products cover tourist buses and buses. The three countries of Libya, Egypt and Tunisia are more chaotic. Although these countries in Morocco and Algeria have riots, they are relatively good. Plus we have stable agents in these two countries. The market is already mature and its impact on us is not obvious. Moreover, in January and February of this year, it was the off-season for sales, and there was no situation that affected the payment and order execution.
Jianghuai Automobile International Company was affected by the unrest, and many insurance companies no longer provide guarantees in the region. Insured orders that have been shipped or delivered are not affected, but new orders cannot be insured, which makes the export risk of funds high. In order to prevent risks, JAC is very cautious when it comes to operations, such as reducing the risk through cash payments. The turmoil has also had an impact on the local dealer team. In the current situation, frequent acts such as smashing and looting, storefronts and vehicles will be destroyed.
The North Africa Office of Sinotruk Import & Export Company stated that most of the orders received before the holiday in West Asia and North Africa have been delivered and completed. There are no orders after the holiday and there is currently no significant impact.
Pay close attention to wait for the situation to be clear
When the riots in West Asia and North Africa will have much impact on the export of commercial vehicles in 2011, many commercial vehicle companies stated that political turmoil is an irresistible factor and that the impact is certain. However, the specific market will have to wait until the situation becomes clearer. make judgement.
According to sources in Zhongtong Bus, in Africa, North Africa is the region with the best economic development in addition to South Africa, and local bus demand is also relatively large. The recent turmoil will certainly have a bad influence. In addition to actively tracking the operations of the vehicles exported to the local area, it is still necessary to promote the products through organizing tour exhibitions when the economy in these areas improves. In addition to these initiatives, we currently have no particularly effective measures.
The relevant person of Daikin Dragon said: Our previous business went smoothly. The current situation is very difficult to predict. It will not be easy to tell how long it will take to resume business. What we can do is to wait for the stability of the local situation and decide whether or not to continue business according to the development of the situation. The uncertain situation, coupled with the fact that it is early this year, makes it difficult to judge the future market.
Relevant persons of Shaanxi Auto Import and Export Company stated that we must first have a stable political environment before we can continue to conduct business on this basis. At present, we are paying close attention to the situation in the local area. We must determine whether overseas strategies will be adjusted accordingly based on the development of the situation and consider shifting the overseas focus when necessary. In Libya, Tunisia, and Egypt where turmoil is relatively serious, economic construction has basically stagnated and there will be no demand in the short term. At present, we can only strengthen communication with SIGC and try our best to control risks. There is active communication with the dealer. The company expects to have a big breakthrough in North Africa at the beginning of the year and can get a lot of orders. It is now estimated that half of the shares should be cut off.
The turmoil in West Asia and North Africa will certainly have a relatively large impact on the export of commercial vehicles in 2011. The data is still not reflected. However, it will not be particularly large because domestic commercial vehicles also have a lot of exports in South America, Southeast Asia and the Middle East. The main influence is in three aspects: First, turmoil will have a certain impact on the economies of North Africa, including the Middle East, and local purchasing power may decline. Second, the risk of orders signed by auto companies will be relatively large. Third, the turmoil caused the price of oil futures to rise more severely, and the car itself is also an oil consumable. In the long run, there may be a lot of pressure on the entire market.
Will not give up West Asia North Africa market
Despite concerns about the current situation, commercial vehicle manufacturers are still very confident about the market in West Asia and North Africa.
Hualing’s overseas strategy in 2011 is no longer waiting to be treated, taking the initiative and becoming passive. By participating in various exhibitions to expand the market, large-scale and comprehensive exhibitions will be less frequent, and local and local mini-exhibitions will be more frequent. Regardless of the change of power or riots, it is estimated that it will stabilize about six months. The overseas market is different from the domestic market. The domestic market is good in the first half of the year and bad in the second half of the year. The opposite is true in foreign countries. The general customers are mostly purchasing in the second half of the year and getting the car to the first half of the second year. Although orders may be reduced in North Africa in 2011, it is thought that developing Central Africa such as Mozambique, Congo, Angola, Ethiopia, and Southeast Asia can expand the market to make up for the North African region's share, thus maintaining the balance of overseas operations.
The relevant person of Shaanxi Auto Import and Export Company said that the political situation in the third world countries has not been too smooth for so many years, but the recent performance is quite obvious. Once the political situation is stabilized, the authorities must also strive to develop the economy. Therefore, there is still demand in the future and the market has great potential. We have made many efforts to develop this part of the market, even if the shift of focus is a temporary shift. We will actively respond and wait for the situation to stabilize. Although this time is not necessarily one year, two years or five years, we cannot possibly give up this market.
Political risks are unpredictable and difficult to circumvent. In such an extreme situation, whether the establishment of a joint venture or general trade will be greatly affected. However, the market in West Asia and North Africa is so large that it is impossible to completely avoid it. In particular, Libya and Algeria have large markets. No matter how big the risks are, they still have the opportunity to go out. Moreover, the area itself has a demand for commercial vehicles, and sales are affected only temporarily. Once the situation stabilizes, it will continue to maintain a good export situation in the later period.
Y&YTRA , https://www.pvcprod.com