Xia Guangsha Liu Jingfeng Editor’s note: Since the birth of the world’s first internal combustion engine car in October 1885, the automobile industry has a history of nearly 130 years. During this period, the automobile industry has experienced development such as assembly lines, industrialization, and product diversification, driving industries such as steel, rubber, and petrochemicals, becoming the “crown jewel” of modern industry. This “crown jewel” has been worn by European and American countries for over a hundred years, forming insurmountable barriers. However, in the past decade, with the global electrification of automobiles, China, with over forty years of experience in the electric vehicle industry, is challenging the global electric vehicle industry and exporting this capability globally, gradually leading the century-old transformation of the entire automobile industry. To this end, Xia Guangsha has launched the “Globalization of Chinese Cars” column to review, observe, and record the overseas expansion of Chinese car companies under the great changes in the global automobile industry, providing new perspectives for the globalization of the Chinese automobile industry. In March, Xia Guangsha visited the Rongcheng RV Industry Belt in Weihai. This article will document the story of a growing cluster of Chinese RV industry going global. Australia in the southern hemisphere is likely to be the first stop for Chinese RVs to “conquer” the world.
In recent years, outdoor camping has become popular, and RVs are entering many middle-class families. The global RV market is dominated by North America with 62.1% and Europe with 28.8%, while Australia and New Zealand together account for about 4.6%, and China’s share is less than 1%. The RV industry contributes $140 billion to the US economy annually. Despite being a niche market, RVs are a lucrative sector. A surprising change is happening in this competitive market. Australia’s Great Ocean Road is considered one of the most beautiful coastal roads in the world. Every year, 2.7 million tourists visit this road, with driving an RV being a popular way to explore it. Many of the RVs on this road come from China, with over 50% of the imported RVs being manufactured there. The RV market, once dominated by Europe and America, is now seeing competition from China, with a county-level city in Weihai, Rongcheng, being the unexpected production hub. Rongcheng, with a population of over 700,000, is China’s largest RV production and export base, producing 30% of the country’s RVs and exporting 70% of them. A county city has opened the door for Chinese RVs to enter the world.
Australians love campervans, it seems ingrained in their bones. A Chinese immigrant living in Australia wrote in a travel journal: “During holidays, on roads just outside the city, all you see are campervans. Campervans are not just a way to travel, they are part of Australian lifestyle and culture.” In Australia, many locals still have the habit of nomadic living. The climate in different parts of Australia varies greatly, with Darwin experiencing over 120 days of rain during the wet season, while some central cities are hot and dry in summer. As one of the best countries for campervan road trips, Australia has thousands of different campsites to cater to various enthusiasts. Moreover, due to the impact of the pandemic, Australians’ enthusiasm for campervan travel has become more evident in recent years. During the 2020 pandemic, as Australia gradually reopened but international travel was restricted, 67% of locals expressed a preference to buy a campervan. As a result, local campervan sales soared. By 2022, Australia had nearly 800,000 campervans, with almost 50,000 new ones added in one year. With a population of only 26 million, this means there are about 30 campervans for every 1,000 people in Australia, second only to the United States. In contrast, China only has 0.14 campervans per 1,000 people, and even in Europe, the number is only 8.7 per 1,000 people. This shows the Australians’ love for campervans. For many Australians, the Great Ocean Road is an unavoidable part of their campervan travels. Stretching between the tumultuous South Pacific Ocean and the majestic mountains of Victoria, Australia, the Great Ocean Road stands out as a pinnacle of natural landscapes in the world, with its stunning and diverse scenery along the way. On the Great Ocean Road, you can enjoy endless views of the ocean and stunning rock formations, walk on beaches, explore rainforests, and experience charming historic towns. You may also encounter unique wildlife such as kangaroos and koalas. The Great Ocean Road is considered the top self-driving route in the world, surpassing even US Highway 1. This iconic road is witnessing a significant change in the global RV industry. During peak season, campsites along the Great Ocean Road are filled with a variety of RVs, many of which are now operated by Chinese owners and manufactured in China. The presence of Chinese in the global RV market is increasing, with many rental companies and RV businesses in Australia and the US having Chinese backgrounds. Chinese-made RVs are becoming the mainstream in the Australian market, with over 50% of new RV imports coming from China. Chinese RVs have gradually become the mainstream in the Australian RV market.
In the Australian RV market, the most popular type is the travel trailer. Statistics show that travel trailers make up nearly 40%-55% of new RV sales each year. Of all the RVs registered in Australia, about 90% are travel trailers, while only about 10% are motorhomes. Within the category of travel trailers, 60% come from Rongcheng, a county-level city under the jurisdiction of Weihai, China, known as the “Chinese RV export base.” The rise of the RV industry in Rongcheng is partly due to its location and existing industrial foundation. Rongcheng has a history of shipbuilding dating back to the 1950s, which later evolved into a significant fishing boat production enterprise. The materials used in fishing boat manufacturing, such as fiberglass, are also used in the construction of travel trailers. In the 1990s, Rongcheng also had a significant automobile modification industry, which later transitioned to producing SUVs and sedans in collaboration with Hyundai Precision. Although Rongcheng’s automobile industry did not thrive, its RV industry flourished in the future. Using Rongcheng’s largest RV production company, Rongcheng Kangpaisi New Energy Vehicle Co., Ltd., as an example, its chairman, Wang Weiyuan, was previously the general manager of Huatai Automobile. In 2014, when Kangpaisi was established, it coincided with the growth period of the overseas RV market. Initially, Kangpaisi’s business was to undertake overseas RV OEM production. Kangpaisi’s IPO prospectus and financial reports revealed that its main customers were E&Z Camping Trailer Company, Aust Camping Trailer Company, PMX Camping Trailer Company, TOP Camping Trailer Company, and EXP Camping Trailer Company, all of which are Australian RV dealers. Subsequently, when Kangpaisi established a foothold in Australia, it moved on to enter markets in South Korea and North America. In 2019, Kangpaisi established a wholly-owned subsidiary in South Korea, where its sales and sales volume have already ranked first in the South Korean RV market. Chinese RV companies are able to establish a foothold in the Australian RV market for two important reasons: Australia’s weak industrial base and heavy reliance on overseas supply chains, where China’s complete and cost-effective automotive supply chain is the preferred choice; and the high transportation costs of towing RVs, which are generally transported in disassembled containers and assembled at the destination, making China’s RVs more suitable for modular assembly. Currently, Rongcheng has over 10 RV production companies and more than 50 component supporting production companies, forming an industrial cluster advantage. In 2023, Rongcheng sold over 16,000 RVs overseas, with exports totaling 1.82 billion yuan, a year-on-year increase of 17.8%. Now, the export volume of RVs here accounts for 70% of the country, penetrating markets in Australia, New Zealand, South Korea, the United States, and South Africa.
Top: Trailer waiting to exit in Rongcheng, photo source: Xiaguang Society, Bottom: Campers parked in a park in Australia, photo source: AUSTRACK CAMPERS official website In 2024, the boom continues. After the Spring Festival, Kangpaisi General Manager Liu Shaohun said, “Our current orders are scheduled for March and April, delivering up to 20 containers a day according to customer demand.” From being unknown in the global RV market to dominating, the influence of Chinese RVs overseas has quietly changed. Since 2014, the Chinese RV industry has developed for 10 years. “In 2014, it can be said that it was the first year of development for the Chinese RV industry. That year, China hosted the 80th World Automobile RV Camping Conference. Since then, various provinces and cities have begun to establish camping associations and plan and build campsites. China’s camping industry has begun to develop steadily,” Ding Hongbo said. For a long time, the camping market in China did not develop, and 90% of campsites ended in failure. This has kept the domestic RV market relatively depressed, and companies have had to rely on OEM production for overseas RV dealers to survive. “It can be said that in the past, Chinese RV companies going overseas were somewhat passive. In the overseas market, they did not have much say and were still dominated by foreign companies,” Ding Hongbo said. But in the second half of 2023, Ding Hongbo clearly felt a shift in market sentiment – “I saw more Chinese companies actively participating in some overseas exhibitions. For example, at last year’s RV show in Japan, many Chinese RV companies would not normally attend, but that time, I saw hundreds of familiar Chinese RV company leaders on site.” Ding Hongbo said. This indicates that Chinese RV companies are starting to actively target overseas markets.
RVs going to sea, against the backdrop of a major change in the global RV market. As an outdoor travel tool that emerged from Europe and America, the RV market has been dominated by countries such as Europe and America, with a global RV ownership of approximately 24 million units, of which the United States alone holds nearly 16 million units, accounting for over 60% of the market. Europe’s RV ownership is 6.5 million units, accounting for 27.1% of the total, while Australia and New Zealand account for less than 4%, and other countries combined account for less than 5%. In this situation, the United States has the world’s largest RV manufacturer, Thor Industries, and the world’s largest RV parts and accessories supplier, Camping World, which practically control the entire global RV industry. However, the overseas RV industry, which has been invincible since ancient times, began to show some “cracks” after 2016. First, there were changes in the traditional large markets of the United States and Europe. In 2018, RV sales in the United States were 484,000 units, a 4.1% decrease from 2017’s 505,000 units. This decline has not stopped since then. According to the latest data, the total RV shipments in the United States for 2023 are 313,000 units, a 36.5% decrease from 2022, hitting a new low in recent years. The slump in the US RV market is mainly due to interest rate hikes leading to inflation, decreased consumer purchasing power, and increased RV inventory. Europe is also not optimistic. According to the European RV Industry Association, the new RV registrations in the European RV market reached 171,945 units in the first three quarters of 2023, a 6.7% decrease from 2022. Shrinking most severe in towable trailers, down 13.2% from 2022 Market growth weak, inevitably squeezing local RV companies’ growth space. Rising production costs such as labor and raw materials, European and American RV companies facing development bottlenecks Meanwhile, potential of emerging markets beginning to emerge. Australia, New Zealand, Japan, South Korea, South Africa, and China gradually increasing market share. Especially Australia, sold 22,000 RVs in 2017, total ownership of 647,000 RVs; but by 2022, annual RV sales close to 50,000, market ownership close to 800,000 growing rapidly. And China, already surpassed Japan by the end of 2021, ranking first in Asia Opportunities in emerging markets, allowing Chinese RV companies to catch up on the dividend. Kangpus is a typical representative, since 2016, its RV sales revenue has maintained a growth level of over 40% for several consecutive years, becoming the largest enterprise in domestic towable RV exports. Looking globally, China has surpassed Australia in comprehensive RV production and manufacturing data, becoming the third largest RV market in the world The time when Ding Hongbo truly felt the industry’s major changes was in the second half of 2023. Abroad, he saw more and more Chinese faces at overseas exhibitions; internally, he found more and more Chinese companies changing their mindset, actively exploring overseas markets, and beginning to lead the transformation of some RV industry “At that time, overseas emerging markets had indeed reached a tipping point,” Ding Hongbo said.
China’s RV companies are seeking change amid the outbreak of emerging markets overseas. The path for Chinese RVs to go global has not been smooth. For decades, Chinese companies have participated in globalization through “OEM” – relying on cheap labor and low-cost resources to do the hardest production work and receive the least profit. This has been a collective pain for Chinese companies in the process of globalization. To win greater value, they need to move towards branding, which is crucial for Chinese companies. However, the global RV market has been dominated by European and American companies for nearly a century, mainly focusing on truck and van chassis modifications. The chassis and accessories of RVs each account for 50% of the cost, but the chassis is the core component, while the accessories are secondary. Therefore, whoever controls the chassis controls the RV brand, according to Ding Hongbo. Currently, there are three major brands of self-propelled RVs in China: Iveco, Ford Transit, and SAIC MAXUS, all of which import their chassis from abroad. “When your chassis is controlled by someone else, it’s hard for your RV to have its own brand,” Ding Hongbo said. As early as 2014, Chinese RV companies realized this issue and began exploring overseas branding. The most direct way to obtain a brand is through acquisitions. In 2014, Zhejiang Taizhou’s New Jiao Auto started its global journey in the RV business by acquiring the well-known Australian RV manufacturer Regent, which has a history of thirty years, and developing a new RV brand, Snowy River, in the Australian market. In 2022, Regent is dominating the Australian market, while the new brand Snowy River wins the “Annual RV” award in Australia. This is the first victory for Chinese RV companies expanding their brands overseas. In 2019, New Jie Ao entered the European market and signed a strategic cooperation agreement with Germany’s second largest RV manufacturer, HOBBY, importing their products into China. “Chinese RV companies can acquire overseas ‘old qualifications’ RV companies because in recent years, with the global economic downturn, overseas manufacturing companies are struggling, while Chinese companies with strong supply chain advantages are able to compete with and even surpass them,” Ding Hongbo said. However, the acquired brands are not yet truly “Chinese brands.” Chinese RV companies need the right opportunity to establish their own brand. Currently, the global trend towards new energy vehicles is growing stronger, and China has unparalleled advantages in the entire new energy industry: China is the world’s largest producer of power batteries, with a global market share exceeding 63%; in addition, China is also the world’s largest producer of new energy vehicles, accounting for 64.8% of global total sales. These data all point to a major shift in the global automotive industry, with a rise in the East and a decline in the West. “In recent years, we have clearly felt that the Western automotive industry is declining, while we are rising in the new energy track,” Ding Hongbo said. Moreover, RVs actually have a natural compatibility with new energy vehicles. Ding Hongbo told Xiaguang Society that hybrid vehicles are very suitable for self-contained RVs, “because their power is suitable for long-distance travel, and the batteries can also be used by tourists while camping.” Overseas, some countries have begun to develop new energy transformation plans for RVs. In September 2022, the Australian federal government expressed a desire to implement low-emission environmental policies. Subsequently, new vehicle efficiency standards were introduced, with limits set on manufacturers’ total sales emissions from 2025. The higher the emissions of vehicles sold as part of the total emissions, the fewer vehicles they can sell before being penalized. Essentially, this is aimed at encouraging manufacturers to produce and sell more fuel-efficient vehicles, providing additional points for the sale of electric vehicles, and in some cases, biofuel, hybrid, and hydrogen vehicles. According to the latest data from Australia, low-emission vehicles are very popular locally, with hybrid vehicles, plug-in hybrids, and battery electric vehicles accounting for 17.4% of sales. In contrast, pure electric vehicles account for only 5.4%. These changes undoubtedly provide Chinese RV companies with an excellent opportunity for a “comeback.” Some RV companies that used to rely on OEM manufacturing have also embarked on a transformation path in recent years. Taking Campis as an example, it is transitioning from an OEM manufacturer for foreign RV brands to owning its own brand and building factories in the Korean market to produce its own brand of RVs. Now, Chinese RV companies have finally gathered the right timing, location, and people for a major transformation, preparing to embrace a wave of globalization. As Cui Dongshu, Secretary-General of the China Association of Automobile Manufacturers, said, the “radical” evolution of the Chinese RV market has finally begun.