Photographer: Nelson Ching/Bloomberg

Great Wall Plans Global Ambitions With Car Research Outside Asia

  • Carmaker's Japan unit to focus on fuel-cell, automated cars
  • Great Wall to open R&D centers in N. America, Europe and India

Great Wall Motor Co. plans to open at least three more overseas research and development centers after setting up its first facility in Japan, as China’s largest SUV maker seeks to build supplier relations and gain access to technology.

The carmaker known for its military-style discipline is targeting to open R&D centers in North America, Europe and India in the next few years, according to Suguya Fukusato, a company vice president. In Yokohama, Japan, where the automaker has a five-member team, the plans call for as many as 200 employees to work on areas including fuel-cell vehicles and autonomous driving.

“Great Wall is becoming a global brand with sales networks in Asia Pacific, Africa and South America,” Hu Shujie, head of Great Wall’s Japan unit, said in an interview on Tuesday. “We understand that without global research and development, we won’t be able to provide global customers with high-quality products and services.”

Chinese carmakers are venturing overseas even as they struggle to break into developed markets such as the U.S., Japan and Europe, where tighter emission and fuel economy rules require advanced technology. They also risk falling behind in the race for fully self-driving cars, seen as the next phase of automotive technology, against global carmakers and the likes of Apple Inc. and Google Inc. without attracting global talent.

“They are sowing the seeds of future competitiveness,” said John Zeng, a Shanghai-based analyst at LMC Automotive. “You can never underestimate these overseas R&D centers. It may be a long way off but eventually they may become the heart and brains of the company.” 

Great Wall’s move follows that of Chongqing Changan Automobile Co., which has established research centers in the U.S., Japan, Britain, and Italy. Zhejiang Geely Holding Group Co. runs a joint research center in Gothenburg, Sweden with its Volvo Car unit. SAIC Motor Corp., China’s biggest carmaker, has said it will set up a venture capital company in Silicon Valley to invest in the latest technologies in the industry.

Great Wall chose Yokohama as the site for its first overseas R&D center because of the network of auto suppliers anchored by Nissan Motor Co., Japan’s second-largest carmaker. The city, about a 40-minute train ride from Tokyo, was also very aggressive in inviting foreign companies to invest, said Great Wall’s Hu.

Great Wall deliveries rose 17 percent to 853,000 vehicles in China last year on demand for SUVs, outpacing the 7.3 percent gain in industrywide passenger-vehicle sales. SUVs are forecast to rise 36 percent to 8.42 million units in 2016, according to estimates by the China Association of Automobile Manufacturers.

The company’s stock rose 2.7 percent to HK$7.32 as of 9:44 a.m. in Hong Kong trading. The benchmark Hang Seng Index gained 1.4 percent.

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