Since 2003, the Chinese automobile industry has increasingly focused on exports as a key growth driver. However, despite the growing attention, achieving substantial export volume remains a challenge for many domestic manufacturers. In contrast, Guangdong's automobile industry has taken a more strategic and comprehensive approach by developing export-oriented projects across various sectors, including vehicles, parts, and specialized materials. This initiative not only reflects the region’s industrial ambition but also serves as a model for future development.
On February 25, 2004, Guangzhou Toyota Engine Co., Ltd. broke ground in Nansha with a total investment of 2.2 billion yuan. The project aims to produce 300,000 engines annually, with 200,000 units designated for export. Notably, the ownership structure of this project deviates from national regulations, which typically limit foreign ownership in automotive ventures to no more than 50%. In this case, Toyota holds 70%, while Guangzhou Automobile Industry Group owns 30%. This exception highlights the strategic importance of the export component, which appears to be the key factor behind the policy flexibility.
Guangzhou Toyota Engine is not the first export-focused auto project in China, but it marks a significant milestone as the country's first engine production facility designed for export. This development signals a broader shift in Guangdong’s strategy, positioning itself as a major player in the global automobile manufacturing landscape.
Beyond engines, Guangdong's auto industry is expanding into multiple areas, including vehicle assembly, components, and specialized raw materials. For example, Honda Automobile (China) Co., Ltd. began construction in the Guangzhou Export Processing Zone in May 2003. The company plans to produce 50,000 economical cars annually, with long-term goals reaching 240,000 units, all of which will be exported. This move underscores the region’s growing role in international supply chains.
In October 2003, the Guangzhou Economic Commission and the Guangzhou Automotive Industry Association organized an information exchange conference for the auto parts sector. Ping Xinguang, director of the Economic Commission, emphasized that Guangzhou aims to become a global supplier of auto parts by attracting international production transfers. Since then, the Pearl River Delta has seen a surge in auto parts development, further strengthening the region’s industrial ecosystem.
Another key player in this movement is Guangzhou JFE Steel Co., Ltd., a joint venture between Guangzhou Iron & Steel Enterprise Group and Japan’s JFE Steel Corporation, one of the world’s largest steel companies. The company produces high-precision hot-dip galvanized automotive steel plates, a product not yet mass-produced domestically. With an initial investment of $200 million, the plant will have an annual capacity of 400,000 tons, supplying both domestic and international markets.
Although the 2004 Guangdong Government Work Report did not explicitly mention the automobile industry, it recognized the sector as a key pillar industry for the first time. The report also highlighted the importance of attracting international industries and continuing the "going out" strategy to expand global influence.
Shenzhen, having missed earlier opportunities in the auto industry, is now aiming to establish itself as a hub for export-oriented vehicle production. Newly elected Mayor Li Hongzhong emphasized leveraging Shenzhen’s strategic location, including its large southern ports and strong fiscal position, to develop a competitive export-oriented auto sector. This vision aligns with the broader trend of Guangdong becoming a leading force in China’s automobile export industry.
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