China'S Car Enterprises "Offensive And Defensive Way" In Europe: New Energy "Bus Corps" Second Wave Shock Wave

10 in the middle of the month, it began to rain in Brussels and the air was cold. But the International Exhibition Center located in the outskirts of the city was exceptionally busy. The twenty-fourth Belgian World Bus Expo (BUSWORLD Kortrijk, Belgian motor show) was held here. Exhibitors, distributors and operators in and outside Europe poured in.

China's bus brand Yutong has brought three new products to the exhibition, including a high-end tour bus developed for the European market and two pure electric buses: U12 and ICE12. As the largest passenger car company in the world, Yutong is spared no effort to push its new energy bus to the whole world, including Europe.

"This is the most important event of our biennium. We can't stay here for 24 hours a day." Ma Kai, the manager of Yutong Bus Nordic region, has received a lot of customers in the exhibition area. "We usually invite customers to (Headquarters), the cost is high, the customers are not sure to go, but here, they all come to see it by themselves."

BYD bus and Yutong have been playing a leading role in the European market. -IC photo-

Europe is vigorously promoting the strategy of public transport electrification, and is expected to become the second new energy bus market after China. The specific plans of each country and region are different, but in 2025, it was already the total replacement time node of some "radical" planning. Some agencies expect that 23 thousand electric buses will be put into use in the European continent (about 1200 vehicles now).

The Belgian auto show was founded in 1944 by the world Bus Union (Busworld). It is the most influential exhibition of the bus industry in Hannover, and is also the vane of the development trend of the world bus. In 2015, Yutong unveiled the first pure electric bus for the European market at that year's Belgian auto show, which opened the new energy offensive in Europe.

Four years ago, the new energy bus grew rapidly under the high subsidies in China, and Chinese bus brands began to emerge in the international market. At that time, China's bus and coach exhibitors went to new China's pure electric buses in addition to Yutong, BYD and Jinlong departments. In the same year, the Yutong pure electric bus became the only non European brand vehicle to be displayed and promoted in the world climate conference held in Paris, France.

At that time, BYD had initially prized the European market. In 2012, it got the first electric bus open bidding project from Europe in Holland. Although the order was only 6 buses, it was a good start: in the following year, it won a 35 order pure electric bus order.

Comparatively speaking, the layout of the strong local bus brands in Europe is much slower in terms of electrodynamics. In recent years, although they have launched new energy vehicles, they have been in the promotion and trial stage for a long time. Take the earlier Mercedes Benz as an example, its first pure electric bus began mass production in eCitaro2018.

At present, the size of electric buses in Europe is still very small. In 2018, the newly registered pure electric buses increased by 48% over the same period last year, but there were only 629 vehicles, accounting for only 5% of the total number of new registered buses. However, based on the trend of bus electrification, the European Parliament predicts that by 2025, the proportion of new registered pure electric buses will be increased to 50%.

Chinese bus enterprises have ushered in the historical opportunity of "conquered Europe". Europe, the birthplace of the auto industry, is a long-awaited market for domestic car companies. Whether commercial vehicles or passenger cars, if they can "Penetrate" into Europe and have a firm foothold, they will directly and effectively promote product strength and brand power.

As a matter of fact, domestic bus companies stepped into the European market as early as the beginning of this century. In the past more than 10 years, although some customers have been accumulated slowly, they are still slightly worse in terms of scale. On the whole, China's bus export areas are mainly concentrated in less developed countries such as Asia Africa and Latin America, but Europe has not yet become the main force.

Can the tide of new energy turn the tide?

BYD in progress

If we only look at the subdivision of pure electric buses, BYD is the first Chinese car company to enter Europe, and the largest European market share. Data show that BYD accounted for 20% of the European electric buses. At present, more than 700 BYD electric buses are in operation or waiting to be delivered.

As early as June 2012, BYD won the 6 European electric bus, the first European order, the Schiermonnikoog of the Holland National Park.

Although this order is very small, it helped BYD open the door to Holland and even the whole European market. In July 2013, BYD soon signed an order for Europe's largest pure electric bus: 35 pure electric buses at Schiphol International Airport in Amsterdam.

The second order was not completed smoothly, because the foreign standards were not in place, and the production vehicles failed to meet the standards. BYD once made Schiphol airport customers doubt. After repeated visits from customers, BYD could only rework, and it took a year to complete the delivery.

Strict standards and long negotiations are not uncommon in developing European markets. BYD's experience in Britain is also not easy. In May 2015, London Transport Department and operator Go-Ahead purchased 51 pure electric buses from BYD. Before that, the two sides had been in contact with more than four years, and the two buses had been tested for a year and a half.

It is worth mentioning that in this project, BYD did not fully produce its own bus, but worked with Alexander Dennis, the largest local bus manufacturer in the United Kingdom (ADL). BYD provided chassis and power systems, and ADL provided the body. BYD said the move was aimed at shortening production time and continuing to strengthen local after-sales service, in order to provide more jobs to the local community.

BYD fully betting on new energy buses, saying that "the turning point of the new energy (bus) market in Europe has arrived". BYD is the first to put into operation in Europe, trying to impress customers with localization and win the market. In 2016 and 2017, BYD built an electric bus factory in Hungary and France, with an annual production capacity of 400 and 200 respectively.

BYD Hungary is said to be the first electric car factory in China to invest in Europe, but it is not a vehicle factory. According to the plan, the factory mainly provides vehicle chassis for French factories and factories co operating with ADL.

Now, two factories have been put into operation, and BYD is also willing to achieve localized supply. However, there is a hidden risk. Some analysts have pointed out that BYD has not yet received enough orders to support the full operation of the plant.

BYD gamble on the future. From the detailed policy of some countries, the electric curtain of buses in Europe has just begun. Recently, some governments have increased subsidies for new energy buses. For example, Germany announced in March this year that it would increase the subsidy of 180 million euros on the basis of nearly 120 million euros subsidy. The United Kingdom announced in February this year that it will invest 48 million pounds (415 million yuan) to support public transport electrification.

Compared with passenger cars, the electric field in the bus sector is more deterministic and more likely to come first. Besides BYD, other Chinese car companies have also launched an attempt to invest and build factories in Europe. In May, Nanjing Jinlong (Kai Wo) Ukraine branch announced that it will open a factory in Ukraine and is expected to be put into production in 9-12 months.

Yutong "positional warfare"

Yutong is the largest car sales company in the world. It has sold more than 120 thousand electric buses and has a global market share of 15% (BYD sold more than 50 thousand vehicles in the world, ranking second). But in the European market, Yutong's pure electric bus orders are relatively fragmented, yet they are not yet in scale.

Data show that in 2018, Yutong ranked fourth in Europe's pure electric bus registration, ranking behind BYD, Solera (Poland brand) and VDL (Holland brand). However, Yutong did not give up the opportunity to develop its stamina.

"The future of Europe will be new energy. We will increase investment and develop more new energy vehicle products." Yutong Bus deputy general manager of overseas markets, Chang Hao, told reporters on twenty-first Century economic report. The theme of Chang Hao's speech at this year's Belgium auto show was "electric change the world". His colleagues in the European region gave all the limited promotion time to new energy products and operation cases.

Compared with BYD, Yutong new energy vehicle entered the European market late. In 2015, the first passenger car developed for the European market was shown at the Belgian motor show. In 2017, the first batch of electric buses exported to Europe was delivered to France. But for many years the fame of the world's first sales volume and the reputation accumulated in Europe have opened up the market for Yutong.

In November 2018, 14 Yutong pure electric buses were delivered to GT group, an importer in Iceland. The fate of Yutong and GT group dates back to ten years ago. In 2008, Yutong exported the first batch of fuel buses to Iceland, and Arthur, chairman of the board of directors of the GT group, began to remember Yutong.

"Yutong brings the most advanced products to Europe." During the auto show, Arthur flew from Iceland to Belgium to serve as a partner for more than ten years: "we believe that Yutong's experience in operation for many years will bring unique value to customers."

The 14 is a "mini" order plus two cars before trial operation, while Yutong currently operates only 16 electric buses in Iceland. But Iceland is a small country and the capital Reykjavik has only 76 buses.

Orders are small, but they do not make sense for Iceland and Yutong. This is the first batch of pure electric buses in Iceland. It is also the beginning of Yutong's re-entry into the Nordic market. During the trial operation of vehicles, representatives from various countries in Europe came to the field to investigate. Denmark ordered 20 Yutong pure electric buses at once after the inspection.

"Iceland has special geographical location and extremely cold climate. It is a natural test ground." Ma Kai, manager of Yutong Bus Nordic region, said that the smooth operation of pure electric buses in Iceland is conducive to Yutong's "prying" the Nordic and even the whole European market.

In addition to Iceland and Denmark, Yutong pure electric bus has also been exported to Finland. In the Espoo District of Helsinki, more than 30 Yutong pure streetcars have been shuttling on the road.

These buses are operated by PL, a state-owned bus operator in Helsinki. They began to focus on the electric transformation of buses in 2014. In the process of collecting information in electric vehicles, they realized that oil conversion was not an easy task. Later, they contacted Yutong in the tendering of electric vehicles.

PL companies value the mileage. They are worried that the cold weather in Finland will affect the normal use of electric vehicles. When the customers visited the factory, they were still not at ease. In order to dispel doubts, Yutong took them to Harbin for a few days, and eventually took the order.

Although Europe is one of the strategic markets, Yutong's "play" is relatively cautious, and emphasizes the implementation of products and services compared to investment and construction. Chang Hao said that in the short term, we should focus on small batch entry, product reserves and network construction, focusing on word-of-mouth. He gave an example. At present, Yutong's new energy bus service network in Europe is all direct investment.

"Europe is a market with a long history. We are still playing the positional warfare and molding the brand according to our previous thinking." Chang Hao said, "no more consideration is given to the quantity, but the long-term development prospects."

It should be pointed out that Yutong entered the European market in the early 2004. Over the past ten years, vehicle sales in Europe have exceeded 8000 units. From this perspective, Yutong pushes new energy vehicles more like "addition", but the emphasis is not on sales, but on brands.

The window period will not be too long.

BYD bus and Yutong have been playing a leading role in the European market. According to statistics, there are currently pure electric vehicles in Nanjing, such as Jinlong (Kai Wo), Haig and Zhong car, which have been delivered to operation.

The Research Report of Ping An Securities pointed out that, in terms of competitiveness, domestic electric buses have an advantage in core components and mass production experience, while European new energy products are still lagging behind domestic prices, and are mostly in the prototype stage.

At present, the European mainstream operators' recognition of electric buses is still not high. Traditional bus brands such as Mercedes Benz, Volvo and so on have invested in technology research and development, but the vehicles have not been on the market.

In the past few years, Europe has put forward the vision of clean emission of vehicles, but there are neither coercive measures nor effective encouragement policies. Most of the government only guides the new energy conversion of public transport.

In twenty-first Century, an economic report reporter learned from the visit that the Nordic countries have little or no subsidy for the purchase of new energy buses, and more are infrastructure support. Taking Finland Espoo as an example, the proportion of electric buses has reached 30% in five years. For this reason, the government has planned three charging piles in the city.

In contrast, China's implementation of public transport electrification strategy earlier than five years in Europe, the direct financial subsidy is to enable the number of electric buses in China to achieve explosive growth. Now, 99% of the world's electric buses are located in China, so that Chinese bus enterprises have a significant first mover advantage.

Shen Mei, an automotive industry analyst at UBS Securities, said in a recent joint meeting that on the one hand, the accumulated data and trampling pits of Chinese car companies were more than those of overseas competitors for many years. On the other hand, the three main components of new energy vehicles, batteries, motors and electronic control, were relatively mature in China, while Europe had no batteries.

This is the pain point for European bus operators. In twenty-first Century, the economic news reporter found that these European customers often had to observe three or five years before purchasing electric vehicles. In addition to manufacturing quality, quality assurance and after-sale support, they would also consider the mileage and operating costs repeatedly before placing orders.

In addition, they will put forward some special needs. For example, the first 9 orders of pure electric buses that Yutong got in Britain were unable to enjoy government subsidies because they were used in towns outside London. Therefore, the design of vehicles should focus on attracting passengers, not only need more seats, but also need a more visible appearance.

The core is whether it can help customers achieve the unity of social value and commercial value. He can not sacrifice too much profits for new energy buses. Yutong's customers in Finland stressed that although the cost of new energy bus is high, the operation cost is very competitive.

In the wave of electrification, Chinese buses not only reap orders, but also enhance brand image in the European market. At the Belgian motor show, three cars on Yutong were awarded official Awards (two design awards and one environmental prize). This is the epitome of China's leading international level.

Dider Ramoudt, chairman of the world Bus Alliance, said: "before China made all the Western technology, but now things are changing. Now the west is starting to imitate China's technology. Over the past ten years, I have witnessed the rough and finer Chinese products. "

This is just the beginning. With the further development of electrification, European brands are starting to start. In the near future, Chinese buses will compete positively with them.

At the Belgian motor show, almost all brands displayed their brand new energy vehicles, including Volvo and Scania. Some brands also brought mass production news, such as Mercedes Benz, its eCitaro bus has shipped to Luxemburg, Norway and other places. This year, it is also expected to deliver three digit vehicles throughout Europe.

"The window period will not be too long. We still need to take the time to complete the layout of new energy vehicle products by 2021 at the latest. " Yutong Bus Europe Regional Manager Li Kejie said. He witnessed the delivery of Yutong's 500th passenger cars in the UK, and also witnessed the first batch of new energy bus orders that Yutong got in Britain, but he was cautious about anticipation in the future.

European domestic brands are still strong. When they produce marketable products and have a sound sales and service network, the pattern may return to their original point. At the beginning of this year, a tendering project spanning the next two years was launched in Paris, including 250-1000 electric buses, known as the largest electric vehicle orders in Europe. The tenderer has tried on some Chinese brand electric buses in the past two years, but the final order was still given to the local brands in France.

"We need to pay more efforts and patience to break through the competitive market of some European brands that occupy the traditional dominant position." Ma Kai also said that Yutong will continue to improve its sales and service network and bring more value to European customers.

In the east wind of the rising of new energy, China's passenger car has initially removed the hat of low price competition, and gained the recognition of developed country's market with technology and quality. Looking forward to the future, brand will become the key in the next phase of competition between Chinese and foreign car companies. Chinese car companies will go forward on the road of brand remodeling.