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Discussion Starter · #1 ·
Brave new world

Carmakers vie for Chinese market

Chinese carmakers to watch

SAIC Motor Corp. Ltd. (;
Shanghai-based SAIC, formerly Shanghai Automotive Industry Corp., is Chinas leading passenger car maker through its joint ventures with Volkswagen AG and General Motors Corp. (Under Chinese law, foreign automakers may build vehicles locally only in joint ventures with local automakers.)
SAICs ventures with GM produce more than half a million vehicles a year and its venture with VW produces around 300,000 vehicles annually.
SAIC has just launched its own-brand vehicle, the Roewe 750, after purchasing rights to the Rover 25 and 75 cars from MG Rover Group.
SAIC was the first Chinese automaker to invest abroad, purchasing a controlling stake in South Korean automaker Ssangyong Motor Co. in 2004.
Chongqing Changan Automobile Co.

(click on English version on site)
Based in Chinas biggest city, Chongqing, with a population of 30 million, Chongqing Changan produces a wide range of vehicles with Ford Motor Co., Mazda Motor Co. and Suzuki Motor Corp.
It exports vehicles, such as the Landwind SUV, and recently forecast its annual vehicle exports would reach 100,000 by 2010.
This year, the Changan Ford venture is benefiting from strong growth in sales of the Focus compact.
FAW Group Corp.

Founded in 1956 with the help of the former Soviet Union, First Automotive Works, as it was then known, began producing medium-duty trucks that played a major role in Chinas modernization.
Today, through its own car making operation, FAW Xiali, and its ventures with Volkswagen AG and Toyota Motor Corp., Changchun-based FAW produces close to a million trucks, buses and cars annually, including a gasoline-electric hybrid car which it recently began producing with Toyota. FAW also plans to rejuvenate Chinas oldest car brand, Red Flag.
Dongfeng Motor Corp.

Founded in 1969, Dongfeng Motor Corp., formerly called Second Automotive Works, is one of Chinas Big Three, along with SAIC and FAW.
Based in Wuhan since 2003, Dongfeng produces commercial vehicles and passenger cars and has formed ventures with Honda Motor Co., Kia Motors Corp. and PSA Peugeot Citroen SA. Its fastest growing venture is with Nissan Motor Co.
Beijing Automotive Industry Holding Corp.

Beijing Automotive formed the first joint venture with a foreign carmaker in 1983 when it partnered with Chrysler Corp.
Mercedes-Benz has also formed a venture with BAIC, but the Beijing automakers most successful partnership is fast-growing Beijing Hyundai Motor Co. - the fourth-largest joint venture in China with 211,000 vehicle sales in the first nine months of this year.
Guangzhou Automobile Industry Group Co.

After Guangzhou Automobiles 1985 venture deal with Frances Peugeot carmaker disappointed both partners, Guangzhou Automobile formed a successful pairing with Japans Honda Motor Co.
The venture, based in the industrial city of Guangzhou, produces the Accord, a top-seller in China, and makes the Fit subcompact for export to Europe.
Guangzhou has taken on two new Japanese venture partners, Isuzu Motors Ltd., and Toyota, as well as South Koreas Hyundai Motor Co.
Geely Automobile Co.

By contrast with Chinas leading automakers, Geely Automobile Co. is a private manufacturer, founded in 1986 by farmer-turned-tycoon Li Shufu.
A decade later, Geely went into the car-making business, starting out by purchasing parts from components manufacturers supplying established automakers.
Geely was the first Chinese automaker to display a vehicle at a U.S. auto show, when it brought its 7151 CK sedan to Detroit in January. The car met only around half of U.S. safety and emission requirements. Geely said it planned to export cars to the United States starting in 2008 and sell 100,000 annually within five years. Geely sells cars under the Geely and Maple brands.
Chery Automobile Co. Ltd.

Chery Automobile Co. Ltd., based in Anhui province in eastern China, was the first Chinese automaker to announce plans to export cars to the United States in a venture with U.S. entrepreneur Malcolm Bricklin. However, they have pushed back their original plans to export cars to the United States in 2007.
Chery is now in discussions to build a small car for DaimlerChrysler AGs Chrysler Group. In addition, it has formed a manufacturing partnership with Italys Fiat Auto, suggesting that it has shifted its strategy and now wants to learn about the business in partnerships with global automakers.
General Motors Corp. and Chery recently settled a high-profile lawsuit filed by GM, which claimed that Cherys QQ small car was a copy of the Chevrolet Spark.
Source: Detroit News research

264 Posts
Discussion Starter · #2 ·

Red may come back into fashion in Beijing as the largest Chinese automaker sets out to update the country's oldest car brand, Red Flag.

First Automotive Works will display the Red Flag HQ3 sedan later this week at the Beijing auto show, which will feature a mind-bending assortment of vehicles ranging from Mao-era throwbacks to gasoline-electric hybrids and stretch Cadillacs built exclusively for China's new tycoons.

The world's leading automakers as well as local manufacturers aspiring to global status will be vying for the attention of Chinese consumers at the show, which opens Saturday to the press.

China's market is becoming more crowded and competitive, but just about every major brand will showcase models in Beijing because the potential rewards for automakers are still huge.

With sales up nearly 30 percent this year, China is on track to overtake Japan to become the world's second-largest vehicle market after the United States.

However, it still bears emerging-market characteristics, such as heavy-handed protectionism. Foreign carmakers, for instance, may produce vehicles in China only in joint ventures with local partners.

"It's unlike any car market that has ever existed," said Jim Hall, a Troy-based analyst with consulting firm Auto Pacific Inc.

"It's a controlled economy. It has a huge number of potential buyers, and it's a market that's technically not open."

Among Detroit's automakers, General Motors Corp. has been the most intrepid, establishing the strongest presence in China.

GM and its Shanghai-based manufacturing partner SAIC Motor Corp. have 11 percent of the market, compared with a 16 percent stake for longtime leader Volkswagen AG and its joint ventures, according to data research firm Automotive Resources Asia Ltd.

"China has been a saving grace for GM," Hall said.

GM is now stepping up the pace by launching more Cadillac models, including the Escalade sport utility vehicle and a long wheelbase SLS aimed at China's chauffeur-driven executives.

"The Cadillac SLS is a very important addition to our lineup in China as it meets very specific market needs," said Jim Taylor, general manager of Cadillac.

So far this year, luxury cars are the fastest-growing segment, with sales up 79 percent in China.

Japanese brands gain

Despite GM's strong showing, Japanese nameplates now outsell American brands in China although most Japanese automakers ventured later into the market.

In the first nine months of 2006, Japanese brands led by Honda Motor Co. and Toyota Motor Corp. took a combined 27 percent of the market, compared with 26 percent for local brands and 14 percent for U.S. brands, according to Automotive Resources Asia.

Ford Motor Co. was slower than GM to invest in China and sells far fewer vehicles, although it benefited this year from strong demand for the Focus compact.

Ford will show the S-Max minivan in Beijing, as well as the Land Rover Freelander 2 and the new Volvo C30 compact.

In addition to seeing a vast and growing market, Detroit's automakers also view China as a low-cost production base.

On a recent trip to China, Ford Executive Chairman Bill Ford Jr. said the Dearborn automaker had doubled parts purchases from China this year.

He also did not rule out the possibility of building a car in China for sale in the United States someday.

A DaimlerChrysler AG executive sparked uproar last year when he raised the prospect of bringing Chinese-built Dodge cars to the United States.

But DaimlerChrysler officials say the automaker is in talks with Chery Automobile Co. Ltd., an aggressive Chinese automaker eager to increase exports.

Ford, DCX handicapped

Auto analysts say Ford and Chrysler are handicapped in China by the lack of an affordable small car. While automakers focus on lucrative luxury car sales, compacts and subcompacts account for more than 60 percent of light vehicle sales in China.

GM competes in those segments by tapping its South Korean GM Daewoo subsidiary to develop and build cars at a competitive cost.

Auto analysts predict Chinese vehicle sales will total 6.5 million to 7 million vehicles this year, with passenger cars and light vehicles accounting for around 4 million. Counting only light vehicles, Japan would still be the No. 2 market.

Toyota will display a new small car in Beijing, as well as the new Camry and Lexus LS460 sedans.

Volkswagen will show two concept cars and the Chinese version of the Passat.

The star attraction at Nissan Motor Co.'s stand will be the Levina Geniss, the first of a new generation of passenger cars that will be sold around the world.

"This car is significant as it is the first time we have launched an all new global model with China being the lead market," said Nissan spokesman Simon Sproule. That's an approach other automakers are likely to follow

249 Posts
The only one to make it in Europe and the USA in the next 3 years will be Nanjing MG. It's strange they aren't on the list above, but I guess it's because they don't make much yet, even in China.....
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