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Discussion Starter · #21 ·
China aims to merge carmaking groups to 10

February 24, 2009

Shanghai, February 24 (Gasgoo.com) Earlier this month, the Chinese government issued its detailed plan to consolidate the auto sector, including decisions to merge the country's major auto-making groups to 10 from 14, and to subsidize rural buyers of new vehicles, China Securities Journal reported on Tuesday.

The auto industry "boost plan," released by the State Council, China's cabinet, on Feb. 11., has detailed the guidelines on lifting the auto market demand, subsidizing the trade-in of old vehicles with new ones, scrapping road tolls, government's buying more Chinese-brand cars, standardizing auto financing and loans, normalizing the used-car market, expanding urban transportation systems, speeding up mergers of auto-making groups, supporting auto R&D efforts, and others.

The detailed plan appreciably supports the mergers and acquisitions by large auto-making groups, saying that the current 14 Chinese carmakers, which have 90% market share together, will be reduced to 10 or less through mergers.



The government wants to see two or three big Chinese groups with annual production each exceeding 2 million vehicles, plus four or five groups making over 1 million vehicles. Such consolidation would help automakers develop new products while cutting costs. A merger in early 2008 between Chinese auto giant SAIC Motor and smaller Nanjing Auto was one deal to pay off.

Some details of the plan also say the government will provide 5 billion yuan ($732 million) in subsidies from March to the end of this year to support rural buyers of vehicles.

The auto plan aims to ensure growing demand for cars so that China's total vehicle sales this year can exceed 10 million units, and grow an average 10% annually over the next three years.

Total vehicle sales rose just 6.7% to 9.38 million units last year. Sales plunged 14.35% from a year earlier in January 2009.

http://www.gasgoo.com/auto-news/1009455/China-aims-to-merge-carmaking-groups-to-10.html
 

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Discussion Starter · #22 ·
Mini-van makers tap rural market

2009-03-10

"The Chinese auto market has entered into a new phase of diversified development. The mini-van market is going to be a blue sea that more and more car manufacturers compete in." said Yin Tongyue, President and General Manager of CHERY on the 2009 mini-van Karry sales service meeting hold recently. At that time, CHERY's new mini-van brand, Karry made its official debut and uses a new logo.


In China, mini-van can serve a wide range of purposes and have a huge consumer base. It is also nicknamed "national condition-based car ". Though mini-van had appeared as far back as in the 1980s, the mini-van market has always been haunted with a strange phenomenon: before 2004, none of the major domestic car makers, such as FAW, DONGFENG MOTOR, and SAIC MOTOR, has ever taken the top 3 positions in both the manufacturing and selling of mini cars; instead, manufacturers such as Chana, Wulin, Hafei and Changhe have taken much more advantageous positions. Some people say that in the mini-van market, second-line car makers play the leading roles while the front-line makers play the supporting parts. There are a very limited number of mini-van manufacturers that possess real competency.


However, with SAIC entering the mini-car market through joining hands with General Motor in merging Wuling motor, FAW Jiabao continuing to explore the market, and DONGFANG "Xiaokang" entering the top 4 mini-market with a market share of 7 percent, the three major domestic auto groups are making their presence felt in the mini-car market.


Even so, compared with the sedan-car market where the competition has been extremely fierce, the competition in the mini-van market is considered to be less sufficient, which offers opportunities for latecomers to take a share. Yin Tongyue, President and General Manager of CHERY, believes that under the influence of the global economy crisis on the auto industry, Chinese market is considered to be the most promising market in the world in 2009. Therefore, many car manufacturers are shifting their effort onto China. They will bring more new products, and the competition in the market will intensify. In the mini-van market, however, there are relatively fewer competitors.


2009 sees CHERY in its second year of full-scale internationalization. CHERY has 4 brands, namely Karry for mini-van, Chery for passenger car, Riich for premium car and Rely for business vehicle, all of which provides CHERY with more strength in competing in the segmented markets of the auto industry. CHERY's entering into the mini-car and mini-truck market, which belongs to the business-vehicle category, is considered to be an important strategic step for the company to achieve an annual production of one million vehicles.


Karry, as one of CHERY's brands, is pinned with great expectation by the company. It is considered to be a highly promising product that would seize the opportunity brought about by the country's policy to boost domestic demands. It is still not clear whether Karry would be able to repeat the miracle created by CHERY in the home vehicle market years ago. Still, CHERY stated that they would make their best effort to score the first place in the mini-van market.


It is told that the Karry Company is the first business unit under CHERY whose products are targeted at the 3rd and 4th-line cities and the countryside. Yang Benhong, standing Vice President of the Karry Company, revealed that after its official launching Karry would continue to integrate the production and sale of its two existing major products, while putting new products into the market successively. The year 2009 will witness an intensive output of mini-vans. Yang pointed out that Karry is committed to manufacturing quality mini-vans and providing medium to small-size cities, counties and towns with the most suitable transportation tools and the best tools that would lead them to prosperity.


In China, the majority of the population still lives in the countryside, towns and the 2nd and 3rd-line cities. Now, small towns and cities are developing quickly. The living quality of peasants and urban residents are getting better. More and more people own small business now. Yet, the consumption capacity in the countryside is still relatively low, which makes it difficult for expensive vehicles to gain popularity. Mini-vans that can be used as transportation tool as well as production tool, however, is suitable for the road conditions in villages, relatively low in price, can transport not only passengers but also goods, and is fitting for meeting the demands of the development of the economy in rural and urban areas. They are becoming the most cost-effective choice for township and rural residents.


As a matter of fact, pioneers in exploring the auto market in the countryside have tasted some sweetness. In 2005, SGMW launched a market promotion campaign in such provinces as Shandong and He'nan. Entitled "send technology to famous villages", the campaign arranged for agricultural experts to go into countryside to give technological lectures, while in the meantime, test-drives of Wuling's mini-van were organized. In villages where field conditions permit, Wuling even provided free examination and maintenance for Wuling's clients to solve practical problems in the using of the vehicles. Statistics showed that in the very year, the annual sale of Wuling's vehicle exceeded 300,000 for the first time, an increase of 37.9 percent year-on-year.



According to statistics from China Association of Automobile Manufacturers (CAAM), the speed-risings of both production and sale in the mini-van market in 2008 were higher than that of the whole auto industry. From January to October 2008, the production and sale of mini-van by major manufacturers were 1.115 million sets and 1.104 million sets respectively, with respective increasing rate of 13.4 percent and 10.8 percent year-on-year.


Nowadays, with the development of the rural economy, the replacement of agricultural vehicle by light/mini type of passenger car and truck, and economic type of sedan has become an irreversible trend. Recently, the State Council has discussed and passed in principle a plan to adjust and boost the auto industry. It is decided that the country will set aside RMB 5 billion yuan to give a one-time subsidy to rural residents who exchange their scrapped motor tricycle or low-speed truck to purchase light-duty truck, or those who purchase mini cars with a displacement that is lower than 1.3 L one-timely. This is no doubt an inspiring message for the mini-van market.


In fact, it is quite an innovative step to shift some of the effort onto the countryside when all new car types are put into cities where competition for sale is fierce. Not long ago, Chana Group announced that it would put in practice the "mini-van to the countryside" policy, taking out RMB100 million yuan of cash to compensate peasants who buy Chana's mini-vans.

http://en.ce.cn/Insight/200903/10/t20090310_18451776.shtml
 

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The chinese nowaday want to own their own car. They believe that it brings them a comfortable live. Because the living standard in China is increasing rapidly, so they also want their live to become better. But the great number of cars will pollute the air. That is not good for health. They should think about this problem
 

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Discussion Starter · #25 ·
Detailed auto stimulus plan released

2009-03-21

BEIJING -- China aims for 10 million units in both vehicle production and sales this year, according to an online government document concerning detailed automobile support package.

China's automobile industry is to yield an average 10 percent growth for its production and sales in the next three years, said the document, released on Friday.

The stimulus package was unveiled by the State Council, the cabinet, on January 14, but the detailed plan was not released by the government until March 20.

The auto support package was among nine others for the country's 10 industry initiatives by the government since January in a bid to cope with the downturn in the short-term, and upgrade its industrial structure for the long term.

In a three-year development plan, the document said by 2011, passenger cars with an engine displacement below 1.5 liters would take 40 percent of the market, and those below 1 liter would have a 15 percent share.

Analysts say smaller-engine cars use less oil and are more environmentally-friendly. They are also cheaper compared with big-engine, gas-guzzling cars.

China would also form two to three auto giants with capacities reaching 2 million in vehicle production and sales, and four to five smaller companies with capacities greater than 1 million in the next three years through mergers and acquisitions, according to the document.

Another government paper concerning stimulus support for the steel sector was also released Friday. It said China would set up several steel giants, with the top five producing 45 percent of the steel by 2011.

Excessive capacity and low industrial concentration have long plagued China's steel sector.

Based on 2007 figures from the China Jianyin Investment Securities, the top five Chinese steel companies produced only about 20 percent of the country's steel.

The steel support plans would strive to eliminate respectively 72 million and 25 million tonnes of obsolete iron and steel production capacities by 2011.

http://www.chinadaily.com.cn/china/2009-03/21/content_7603354.htm
 
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