Sunday, 2024 July 21

China’s GAC Aion to ramp up hiring in preparation for overseas expansion

After two years without launching a new car, GAC Aion is about to enter a period of intensive product releases.

“In the second half of the year, three new cars will be launched, with one new car hitting the market every two months to fill our market gaps, including products priced between RMB 100,000–200,000 (USD 13,770–27,540) and those above RMB 300,000 (USD 41,310),” said Gu Huinan, general manager of GAC Aion, during a recent media briefing regarding the products, technology, and business status of the Aion and Haobo brands. He also mentioned that GAC Aion is preparing to complete its extended-range and plug-in hybrid vehicle lineups, with plans to launch these starting in 2025.

Addressing previous rumors about GAC Aion’s 20% layoffs and mass cancellations of agreements with fresh graduates, Gu stated that these rumors are unfounded. He cited GAC Aion’s relatively small workforce size of 7,000, making a 20% layoff—equivalent to around 1,400 people—improbable.

Regarding GAC Aion’s factories in Thailand, Indonesia, and Changsha, Gu said they will commence operations this year and are currently hiring. Additionally, in line with the company’s plan to establish 100 self-operated stores, GAC Aion will add 2,000 new positions in the second half of 2024.

This year is significant for Chinese new energy vehicle makers venturing overseas, and GAC Aion is determined to fulfill its international ambitions. Gu highlighted that the second-generation Aion V will be manufactured and rolled out simultaneously in Thailand, with Southeast Asia serving as the company’s base for global expansion.

GAC Aion V is a family-oriented electric SUV. The advertising text reads: “For the price of a 5-seat, get 3 rows for 7 family members”. Photo source: GAC

GAC Aion is currently exploring the European market and will continue to investigate production bases in South America, the Middle East, Central Asia, and Africa in the second half of the year. According to Gu, GAC Aion expects to establish production bases in these regions within the next two years.

Regarding capacity building, Gu shared that GAC Aion has always adhered to the principle of small investments, quick output, and rolling development. For instance, Aion targets building factories with capacities of 20,000 or 30,000 units, instead of immediately building larger ones with capacities of 100,000 or 200,000 units. This has also become a guideline for the development of GAC Group and GAC Aion in terms of scale.

In terms of overseas talent acquisition, GAC Aion’s recruitment strategy is to prioritize local manpower for branding, sales, service, corporate management, and human resources roles, while product- and production-related talents should mainly come from China.

Building an industrial chain around its complete vehicle factories, including component manufacturers, is also one of the challenges of expanding overseas. According to Gu, GAC Aion has accumulated years of experience in building its industrial chain, with GAC’s investments covering multiple facets including intelligent cockpits, autonomous driving, and energy technology, from raw materials and manufacturing to photovoltaic storage and recycling.

Now, GAC Aion’s investments look ripe for harvesting. Gu said that the batteries, motors, and electronic controls for Haobo cars and the second-generation Aion V are all produced in-house, enabling control over resources, performance, and quality.

Gu believes that the difficult days for GAC Aion are about to pass and good times are coming. However, this does not necessarily mean a smooth path lies ahead; the overall trend is upward despite the twists and turns.

In an interview with 36Kr, Gu shared more insights regarding GAC Aion.

36Kr: You mentioned a lot about talent development domestically. How about overseas talent development? Can you share some plans for recruiting local manpower for factories in Thailand and Indonesia?

Gu Huinan (GH): Initially, we will adopt a form of domestic support, primarily sending personnel from China to overseas locations, with local talent as a supplement. We hope to transition to a model where local talent takes the lead, supported by Chinese personnel, within about two years. This will be the model for each base going forward.

Our recruitment strategy overseas prioritizes local manpower for branding, sales, service, corporate management, and human resources roles, while product- and production-related talents will mainly come from China.

There are generally regulations overseas requiring that, for every Chinese employee, four local employees must be used, so we can’t deploy too many Chinese personnel. Additionally, cultural differences necessitate increased training efforts.

36Kr: Compared to competitors, what advantages does GAC Aion have in the overseas market?

GH: Brand recognition isn’t our strongest suit abroad since international awareness of Chinese brands is still limited. However, our key advantages lie in quality and technological innovation.

For instance, in our discussions with partners in Thailand, they have shown strong interest in our advanced features like autonomous driving technology and gull-wing doors. Even though countries like Thailand are still developing their new energy technology infrastructure, their eagerness for cutting-edge tech is a significant advantage for us in the overseas market.

36Kr: Seven production and sales bases have been established globally. This year, the factories in Thailand and Indonesia will start operations. Looking ahead, what scale do you aim to achieve with overseas factories? Could you share some details about the export model and direct export strategy?

GH: We adhere to the principle of small investments, quick output, and rolling development. […] Therefore, our scales are small, such as 20,000 or 30,000 units, and we don’t immediately build factories with capacities of 100,000 or 200,000 units. This is also a fundamental guideline for the development of GAC Group and GAC Aion in terms of scale.

There are two main models for our overseas operations: building bases, and direct exports. Frankly speaking, since China’s labor productivity is much higher than that of other countries, direct export is the best option.

However, why build factories locally? Because of tariff barriers and import licenses in some countries, which may limit the number of vehicles you can import each month, affecting your scale. So, if there are no such barriers, we would rely completely on vehicle exports. If the local industrial chain is underdeveloped and 100% of the components need to be shipped from China, it is not cost-effective.

Therefore, we mainly consider these three issues: tariffs, construction scale, and the industrial chain.

36Kr: GAC Group is making a concerted effort to go overseas. Within the group, Aion and Trumpchi are leading the charge. How much policy support can Aion expect from the group?

GH: We have a division of labor. The Southeast Asian market is directly managed by GAC Aion, while other regions are managed by GAC International.

Basically, we go wherever there is a market. If a region mainly uses electric vehicles, then that base is managed by GAC Aion, and vice versa. So, there is no issue of how much policy support we receive.

KrASIA Connection
KrASIA Connection
KrASIA Connection features translated and adapted high-quality insights published on 36Kr.com, the largest and most influential technology portal in Chinese language with over 150 million readers across the globe.
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