Rongcheng aims to grow sector into pillar by building complete export supply chain

On the production lines run by a recreational vehicle producer in Rongcheng, a county-level city in Shandong province, workers were busy assembling camper trailers in late November. These campers will soon be shipped to overseas markets including the United States and South Korea.

During the first 10 months of 2022, over 1.3 billion yuan ($186.2 million) worth of RVs were exported via Rongcheng Customs, a year-on-year increase of 20.9 percent, said the department.

Good performance overseas

Liu Shaoxun, general manager of Rongcheng Compaks New Energy Automobile Co Ltd, said the company was scheduled to produce a total of 6,000 RVs in 2022 according to placed orders, including self-propelled vehicles and trailers.

"Around 95 percent of RVs we produce, mainly trailers, are for overseas markets," Liu said.

Founded in 2014, Compaks has developed into a major trailer exporter in China thanks to supportive local government policies.

"Rongcheng aims to build the RV sector into a pillar industry by developing a complete RV industrial chain, which benefits us in sectors ranging from parts purchasing and marketing," he said.

The city, which has a population of 714,000, is now home to 10 RV producers. The RV industry provides jobs for over 4,000 people in the city. There are also more than 50 RV accessories and parts suppliers as well as production enterprises running businesses ranging from steel materials to air conditioners and wood floorboards and panels, according to statistics provided by the city government.

RV producers in Rongcheng make 30 percent of all RVs in China and its RV exports account for 70 percent of total RV exports by unit volume nationwide. The city was named an export base for RVs in 2017 by the China Association of Automobile Manufacturers.

Located on the easternmost tip of the Shandong Peninsula, Rongcheng faces Japan and South Korea across the sea. Both seaports and the China-Europe Railway Express freight trains provide convenient access for products produced in the city to reach overseas markets.

The convenient shipment process and comfortable and pleasant living environment offer Rongcheng advantages to develop the RV industry, which caters to tourism and recreational sector participants, Zheng Yuewen, mayor of Rongcheng, said at an RV promotion conference held in the city in October.

A total of 21,000 RVs, including self-propelled models and trailers, rolled off production lines in Rongcheng in 2021, generating total sales of two billion yuan. Trailers produced in the city are sold to countries including Australia, New Zealand, the US, South Korea and Japan, said the city's bureau of industry and information technology.

In countries like the US, Canada and Australia, trailers usually account for 90 percent of total RV sales, Cui Dongshu, secretary-general of the China Passenger Car Association, said in a recent article about the RV market.

Cui said trailers are preferred by people in those countries mainly because there are more vehicles that can be used to tow trailers, and in addition, trailers are more afford-ably priced.

To expand overseas markets, Compaks has built a warehouse in Australia and a production plant in South Korea.

"The overseas facilities have been playing an important role in ensuring steady product supply and after-sale service for offshore markets," said Liu.

The RCEP Certificate of Origin, which offers preferential tariff treatment, has given RV producers in Rongcheng a boost to expand overseas markets.

Molin Automotive Technology Co Ltd in Rongcheng sold more than 2,150 RVs to overseas markets during the first 10 months of 2022.

Molin had applied for 180 certificates of origin, which had saved 10 million yuan in tariffs for the company, according to an article published on the official website of Qingdao Customs, which oversees Rongcheng Customs.

Qingdao Customs has been using smart systems to verify certificate applications submitted by companies to ensure companies get certificates in a timely fashion.

Innovation-driven technologies

RV producers in Rongcheng are building state-of-the-art production lines to increase productivity.

Rongcheng Mingjun Outdoor Leisure Products Co Ltd spent more than 80 million yuan building two workshops that cover a total area of 10,000 square meters to produce RVs.

The automated welding workshop and assembly workshop will boost RV productivity in Rongcheng, said Xiu Chuanyi, executive supervisor of the company.

Mingjun has teamed up with Harbin University of Science and Technology to jointly develop welding technology, a major process used in trailer production.

To meet consumer demand for personalized designs, Compaks has been using an industrial internet system through which consumers can select customized options.

"For example, consumers can choose furniture according to their needs, a bunk bed or a single-person bed, an outside cooking facility or an inside one," said Liu.

Compaks spends 6 percent of its sales income on innovation annually, in a bid to provide more comfortable and reliable products for consumers, Liu added.

For example, it took the company one year to find a way to replace its steel chassis with an aluminum alloy alternative to make the trailer lighter and thus more fuel efficient, he said.