In 2004, the export-oriented automobile industry in Guangdong was gaining momentum, marking a significant shift in the region's industrial strategy. While domestic automakers were competing fiercely to boost their export volumes, achieving substantial growth remained challenging, as even exporting 1,000 vehicles was considered a major milestone. However, Guangdong took a more comprehensive and strategic approach by focusing on developing export-oriented projects across various sectors, including vehicles, auto parts, and specialized materials.
One of the key developments came on February 25, when Guangzhou Toyota Engine Co., Ltd. broke ground in Nansha. This project, with a total investment of 2.2 billion yuan, aimed to produce 300,000 engines annually, 200,000 of which would be exported. Notably, the ownership structure of this project deviated from national regulations, as Toyota held 70% of the shares while Guangzhou Automobile Industry Group held 30%. This arrangement marked a breakthrough in policy flexibility, highlighting the importance of export volume in breaking through traditional restrictions.
Guangzhou Toyota Engine Co., Ltd. was not the first export-oriented automobile project in China, but it was the country’s first engine-focused export initiative, signaling a new era for Guangdong’s automotive manufacturing sector. Beyond engines, the province also expanded into other areas such as vehicle assembly, auto parts, and specialized raw materials.
In May 2003, Honda Automobile (China) Co., Ltd. launched its operations in the Guangzhou Export Processing Zone, aiming to produce 50,000 economical cars annually, with long-term plans to reach 240,000 units—entirely for export. Meanwhile, the Guangzhou Economic Commission and the Guangzhou Automotive Industry Association organized an information exchange conference in October 2003, where officials emphasized the goal of becoming a global supplier of auto parts by attracting international production transfers.
In terms of raw materials, Guangzhou JFE Steel Co., Ltd., a joint venture between Guangzhou Iron & Steel Enterprise Group and Japan’s JFE Steel Corporation, began operations in early 2004. The company specializes in high-precision hot-dip galvanized steel plates, a product not yet mass-produced domestically. With an initial investment of $200 million and an annual capacity of 400,000 tons, the plant also targets exports to Southeast Asia.
Although the Guangdong Provincial Government Work Report did not explicitly mention the automobile industry, it was listed as one of the province’s pillar industries for the first time. The report also stressed the importance of attracting international industrial transfers and continuing the “going out†strategy.
Shenzhen, having missed earlier opportunities in the auto industry, sought to position itself in the export market. New Mayor Li Hongzhong highlighted the city’s potential, citing its large southern ports and strong financial resources as key advantages for developing an export-oriented automobile industry.
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