Thursday, July 26, 2007

Chinese carmakers going it alone and getting past 'Hongda'

BEIJING--In the city of Wuhu in Anhui province, factories of Chery Automobile Co. stand along the Yangtze River on a plot 100 times the size of Tokyo Dome.

Chery Automobile Co.'s compact car A1 is displayed in Shanghai in April. (REI KISHITSU/ THE ASAHI SHIMBUN)
Factory workers whose average age is in the early 20s appear in blue uniforms, and next to the plants sits a research institute operated with the support of China's Ministry of Science and Technology.

Chery was established in 1997 with a capital of 27 billion yen from five public enterprises run by local governments.

"We are still in a boyhood stage," said Yin Tongyao, 44, chairman and president of the company.

But the "boy" is quickly growing up.

Until now, the Chinese car industry has been led by makers jointly set up by Chinese state-run companies and foreign manufacturers.

In recent years, however, Chinese firms, such as Chery Automobile, Geely Group and Lifan Group, have not depended on foreign companies. Now, they are improving sales by manufacturing cheap vehicles, and some of them are looking to increase their exports.

According to Yin, the company's sales have shown continuous growth, increasing by 62 percent from 2005 to 310,000 units in 2006. Sales have expanded more than 10-fold in the first five years since it started to sell cars on a full scale.

In March this year, Chery took the top spot in terms of monthly sales of passenger cars in the Chinese market. It is the first time in 20 years that a Chinese company that is not a joint venture with a foreign maker was No. 1.

Slogans are posted inside Chery factories that say, "Let's make new products by ourselves," and "Let's become a world-leading company."

Three popular models--the Dongfangzhizi sedan, the V5 station wagon and the Ruihu SUV--move down the production line.

Other posters on the wall explain details of Toyota Motor Corp.'s production system.

"Toyota is our teacher. We are students," Yin said.

An executive of a Japanese carmaker recounted the day when he visited one of Chery's factories. Yin asked about what makes a good layout for a factory, and then diligently noted down the executive's reply.

Chery executives work hard. They have been given the nickname "7-15," which means "working 7 days a week, 15 hours a day."


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10:20 PM  

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