Part 8/12:
The discussion emphasized that Chinese automakers are initially adopting a phased approach to international expansion. In the first phase, they establish local assembly plants in target countries—such as Thailand, Indonesia, Brazil, or Hungary—to avoid tariffs and regulatory hurdles. However, critical components like batteries and motors are still imported from China at this stage because local manufacturing infrastructure for these parts is not yet scaled.
Over time, as the local markets grow, there is substantial pressure and expectation for Chinese companies to develop complete local supply chains. Governments in host countries are increasingly encouraging Chinese automakers to build local factories and sources, with the promise of economic development and technology transfer.