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Discussion Starter · #1 ·
First Automobile Works will install in the environs of mexican city of Morelia, Michoacán, in an coinvestment of about 200 million dollars with mexican tycoon Ricardo Salinas Pliego, to produce compact and subcompact vehicles that will commercialize in the network Elektra in charge of Carlos Septién, first in Mexico and after in Centro and South America.

Felipe Calderón, President of Mexico, will place the first stone this next Thursday November 22nd.

An official notice of the mark announcing its arrival to Mexico is expected shortly.

FAW will take advantage of the network 1.300 Elektra stores pertaining to the Group Salinas and of course the aggressive plans of financing of the Banco Azteca.

You can read the full note in spanish at autocosmos.com.mx
 

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More news.

Salinas Group, Mexican financial services, communications and retailing giant, and China's First Automobile Works Group(FAW) has held a ground breaking ceremony for their joint venture plant in the state of Michoacan in western Mexico last Friday, Automotive News reported.

Mexico's President Felipe Calderon participated in the ceremony and laid the cornerstone of the plant. "The plant is expected to cost about $150 million, and will take three years; it has an initial output capacity of 100,000 vehicles annually, Salinas spokesman Daniel McCosh told Automotive News.

Beijing-based newspaper Jinhua Times reported on November 12 that Tianjin FAW Xiali Automobile Co, a subsidiary of FAW, is ready to build an overseas plant in Mexico by the end of this month. When the plant is completed in 2010, it will produce Tianjin FAW Xiali Automobile Division's compact cars named Xiali and Weizhi, which will be sold in the Mexican market.

Salinas group is one of the top five syndicates in Mexico and has a history of 101 years. It operates in fields include banking, insurance, publication and communication. The conglomerate posts annual sales of $6 billion and earnings before interest, taxes, depreciation and amortization of $1.1 billion in 2006.

China's FAW initially hoped to open its first overseas plant in Russia, but later changed the plan on the grounds that the Russia market was saturated after a wave of foreign investments and that the Russian government has set up obstacles to prevent the flooding of foreign investments.

Mexico is Latin America's largest vehicle exporter and the world's seventh largest producer of vehicles. Many major automakers, including Ford, GM, Daimler Chrysler, Nissan, Toyota, Volkswagen etc, have already established assembly plants in the region.
source:Gasgoo.com
 

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it seems all big guys like faw, hafei, gwm, chery are thinking of creating plants in that region
 

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More on the FAW factory in Mexico at China Car Times:

It seems FAW are spreading their international wings with the new Mexico factory

MEXICO CITY - Construction began Friday on an auto assembly plant in central Mexico that will create thousands of jobs and be the country’s first to produce Chinese cars.

Mexican President Felipe Calderon led groundbreaking ceremonies for the factory, which will be financed by an arm of Mexican conglomerate Grupo Salinas and China’s state-owned FAW Group Corp., one of the nation’s largest automakers.

“Most of the world’s investments used to go to China, and today China has come to invest in our country because it recognizes an enormous opportunity in Mexico thanks to its domestic market” and proximity to the U.S. and Latin America, Calderon said.

Due to open by 2010 in Michoacan state, the plant is expected to churn out 100,000 cars a year for sale in Mexico and Central America, according to a statement from Grupo Elektra, Grupo Salinas’s electronic goods and consumer financing unit.

Grupo Elektra and FAW are investing $150 million to construct the factory, which is expected to employ some 4,000 people and bring up to 20,000 additional jobs to the local economy, Javier Sarro Cortina, head of Grupo Salinas Motors, said Friday.

FAW-line cars will start selling in Mexico early next year for as much as 10 percent less than the current market average, Grupo Elektra said.

The cars will retail for as low as $6,280, Grupo Salinas chairman Ricardo Salinas Pliego said at the groundbreaking.

Chevrolet’s smallest Chevy sedan, one of Mexico’s most affordable cars, sells for about $7,100
 

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Xiali to ship 25,000 sedans to Mexico

Tianjin FAW-Xiali to ship 25,000 sedans to Mexico

Tianjin FAW Xiali Automobile Co, a unit of FAW Group (First Auto Works), will ship 25,000 sedan vehicles to Mexico, state-run local newspaper Tianjin Daily reported.

"The 2,500 Weizhi sedan vehicles will go on sales in Mexico market by January 2008,” said Yang DongLiang, vice mayor of Tianjin at the ceremony for this event.

The 25,000 Weizhi sedan exports is part of the 4,500 vehicles zero-duty import contract reached in November between Tianjin FAW-Xiali and its Mexican partner.

Last month, Tianjin FAW-Xiali signed a strategic partnership agreement with Mexican company GRUPOEIEKTYA. Under the agreement, Tianjin FAW-Xiali and the Mexican company will start a $150 million joint venture assembly plant in Mexico.
The joint venture, with an annual capacity of 100,000 vehicles, will start to produce Weizhi sedan by 2010. The vehicles will be sold in Mexican and Latin American markets.
source: Gasgoo.com
 

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FAW Website

Link by Preguntas frequentes:
www fawmexico com / faq html

Preguntas Frecuentes

¿Cuanto tiempo tiene FAW en el mercado?

La FAW se estableció en julio de 1956 con la asesoría técnica de los ingenieros automotrices de la extinta Unión Soviética.
¿Dónde habrá agencias de FAW en México?

La compañía anunciará en breve la ubicación de la primera agencia en la Ciudad de México, además de que abrirán otras en los Estados de Guerrero, México, Michoacán, y Morelos en las que venderán dos modelos de autos subcompactos en dos versiones, hatchback y sedán con tres motorizaciones de 1.0 a 1.5 litros.
¿Cuánto costarán los vehículos FAW?

La versión básica de estos vehículos tendrá un precio de salida de 69,000 pesos y la de lujo 114,000 pesos.
¿Cuándo iniciará formalmente la venta de los vehículos chinos FAW en México y cuáles son?

La venta de los automóviles comenzará a finales de enero del 2008 a través de cinco agencias en el área metropolitana. El plan es abrir en total 20 puntos de venta con talleres de servicio durante el primer trimestre del próximo año, todos propiedad de Grupo Salinas, ubicados en Michoacán, Estado de México, Distrito Federal y Morelos.
Dentro de las tiendas Elektra más grandes, habrá un espacio perfectamente identificado destinado a exhibir los autos. Para la venta y el servicio los clientes serán canalizados a una de las 20 distribuidoras especializadas.
Este tipo de unidades sólo se venderá en México y la idea es exportar a Centro y Sudamérica. FAW y Grupo Salinas descartan por el momento participar en el mercado estadounidense.
Los automóviles son de tipo sedán cuatro puertas y hatchback llamados F1, F4 y F5 con motorizaciones a gasolina de uno, 1.4 y 1.5 litros de desplazamiento respectivamente cuyos precios oscilan entre los 65 mil y 115 mil pesos dependiendo de la versión, ya sea básica o equipada.
¿Cuántas unidades contemplan vender en sus primeros años de operación?

En el primer año de comercialización se importarán cinco mil unidades que es la cuota establecida por las autoridades. Podría aumentar esta cifra dependiendo del avance en el proyecto de la instalación de la planta. Dicho proceso de inversión está supervisado por la Secretaría de Economía y para el 2009 la cuota de importación será de por lo menos cinco mil unidades.
¿Qué requisitos les pidieron las autoridades para poder importar automóviles chinos?

Cualquier persona física o grupo empresarial puede hacerlo (importar unidades chinas) siempre y cuando cumpla con el decreto automotriz. Éste exige que para poder importar vehículos libres de arancel se debe establecer un compromiso para instalar una planta con una inversión mínima de 100 millones de dólares y fabricar 50 mil vehículos o más anualmente. El proyecto se debe realizar a más tardar tres años después de haber iniciado la participación en el mercado mexicano.
Si no se cumplen estos requisitos, la importación se puede hacer pero pagando el respectivo arancel.
¿En qué consiste el proyecto de ensamble?

El desarrollo del plan de comercialización y producción se llevó cerca de dos años y se han invertido 10 millones de dólares. Se tiene contemplado invertir 150 millones de dólares en la instalación de la ensambladora en el estado de Michoacán de los cuales 100 millones estarán destinados a la adquisición de la maquinaria y equipo.
El objetivo es iniciar la producción en el 2010 y fabricar 100 mil unidades al año, cifra que podría subir hasta 250 mil dependiendo de la demanda en los mercados nacional y externo.
Ofrecerá empleo directo a cerca de cuatro mil trabajadores y otros 16 mil empleos indirectos. Se escogió Michoacán por estar allí el puerto de Lázaro Cárdenas por donde llegan desde Asia los automóviles y las autopartes, además de que existe la infraestructura suficiente. Además, el 60 por ciento del mercado automotriz nacional se localiza en el centro del país, muy cerca de la zona donde se localizará la planta.
¿Podría explicar los términos en que se estableció la alianza con FAW?

Por el momento, el 100 por ciento de la inversión es del Grupo Salinas y se espera que en un futuro la compañía china adquiera hasta el 50 por ciento de las acciones. De ellos (inversionistas de FAW) depende con qué porcentaje de inversión quieren participar y actualmente sólo es un socio tecnológico que surte el producto y proporciona la capacitación técnica.
¿Cómo describiría su plan de negocios?

En pocas palabras diría que al decidir vender automóviles se pensó en que la clave es elegir primero un socio tecnológico de clase mundial.
FAW produce al año un millón 400 mil vehículos que tiene alianzas con Volkswagen, Audi, Toyota y Mazda.
En segundo lugar, la estrategia es la elección de una adecuada línea de automóviles, óptima, tanto en precio como en calidad, considerando el perfil del cliente- objetivo.
¿Qué piensa de las opiniones negativas respecto a la calidad de los automóviles chinos?

Son críticas infundadas. Los representantes de Grupo Salinas y sus empresas han realizado durante muchos años diversos viajes a China, para adquirir productos de todo tipo y podemos decir con toda certeza que hay empresas que trabajan con estándares de calidad muy altos.
China ya es líder en muchos sectores de la tecnología y en nuestro caso hemos evaluado a conciencia cada uno de los autos que venderemos en México.
La calidad es más bien responsabilidad de dos, tanto del fabricante chino como del importador pues éste en muchos casos busca sólo vender cosas baratas sin pensar en la satisfacción del cliente.
¿En qué consistió la evaluación a los vehículos?

A finales del año pasado se iniciaron pruebas de conducción en todo tipo de caminos del territorio nacional. Se tomó nota del nivel de emisiones contaminantes, resistencia del motor, preferencias del cliente, clínicas de conducción con posibles compradores, ergonomía, colores exteriores y calidad del tren motriz.
Se reforzó la suspensión, se cambiaron los amortiguadores, se colocó barra estabilizadora más gruesa y se hicieron cambios en los acabados de los interiores para adaptarse al gusto de los clientes nacionales.
¿A qué firmas automotrices considera sus rivales directos?

Más que "pelear" en el mercado tradicional la idea es atender un sector olvidado por las firmas automotrices actuales. Nuestro cliente- objetivo es aquel que se ve en la necesidad de adquirir un auto chatarra porque no tiene acceso a planes de financiamiento a su medida. El cliente potencial es ese que no puede comprobar ingresos o quien vive en comunidades donde las concesionarias automotrices brillan por su ausencia.
 

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Discussion Starter · #7 ·
FAW starts selling cars in Mexico

Five models of Faw are available for mexican market.
Yesterday Grupo Salinas presented F1 sedan and hatchback (vita N3) F4 (maybe vita A series, there are no front images available yet) and F5 (vita C1) sedan and hatchback.
Prices were also revelaed
F1 hatchback from $69,900.00 (mexican pesos) about $6,350.00 US
F1 sedan from $79,900.00 (mexican pesos) about $7260.00 US
F4 sedan from $89,900.00 (mexican pesos) about $8,170.00 US
F5 hatchback $104,900.00 (mexican pesos) about $9,530.00 US
F5 sedan $114,900.00 (mexican pesos) about $10,400.00 US
The dealer network will be revelated soon but first dealer will be placed in Mexico City.
You can see the models at the website fawmexico.com
 

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These cars are not attractive at all - per US standards; but Mexico is filled with crappy old junky cars...

The prices are good though - beats having to drive a smelly used car!

The cars needs to much better if they ever want to export to the US.
 

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FAW Mexico current lineup - from Spanish Autoblog (translated in English with Babel Fish Translation):

F1
It is the access model. Account with plastics and a quite poor equipment although in return is the cheapest model of the market, costing something more than 69,000 pesos (the Pontiac Matiz was until now more cheap costing 80,000 pesos). It is possible to be acquired with bodies hatchback and sedán and uses a gasoline mechanics of a liter with 65 CV and manual change.
* Base 5p 69,900 pesos (4.392 €)
* Luxury 5p 74,900 pesos (4.702 €)
* Sedán base 79,900 pesos (5.021 €)
* Sedán luxury 86,900 pesos (5.461 €)

F4
He is practically equal to the F1, but it incorporates a mechanics of 1.4 liters with 85 CV. The ABS or the double lacks important details like airbag. As much the F1 as the F4 is known in other markets as Xiali and has much to do with extinct the Daihatsu Charade of years 80.
* Sedán base 89,900 pesos (5.650 €)
* Sedán luxury 96,900 pesos (6.090 €)

F5
It is the most modern note and model supplied as much in quality of materials as in security. In addition to the double airbag like ABS + EBD, adds to a interior with a completion to the height of its price and aesthetic, inner as outer modern and a as much attractiveness. We know it in other markets under denomination FAW Vita (Russia) or C1, in China. It mounts a motor of Toyota origin with 1.5 liters with 101 CV.
* Hatchback luxury 104,900 pesos (6.592 €)
* Sedán luxury 114,900 pesos (7.220 €)
FAW Mexico official site:
http://www.fawmexico.com/

Presentation of company and vehicles to the media (in Spanish):
http://www.autocosmos.com.mx/noticias/expand.asp?id=16337



 

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FAW in Mexico

China cars get Mexico beachhead

Friday, January 09, 2009

FAW Group Corp., one of China's three largest domestic auto manufacturers, has begun selling new cars for as little as $6,550 in Mexico in what is believed to be the first foray by a Chinese auto-maker into North America.

Grupo Salinas, a specialty retailer and the carmaker's commercial partner, brought in an initial shipment of about 6,000 FAW cars by boat to Mexico City and has found willing buyers for a portion of them, company spokesman Daniel McCosh said yesterday.

"They're not all sold," Mr. McCosh said. "The higher-end and the lower-end vehicles are moving better than the mid-priced models."

Industry executives with rival companies have been nervously anticipating the arrival of Chinese vehicles into North America because of their potential to dramatically shake up the market with their low prices. The cheapest new car in Canada now is Hyundai's Accent hatchback at $9,995.

In Mexico, Chinese car companies may have found a beachhead into the continent. Ford Motor Co.'s former top executive in Mexico, Kathleen Ligocki, heads the Grupo Salinas auto unit that sells the FAW cars.

The low end of the car market "is where consumers in Canada are heading to deal with higher costs of operating and the general demise of the economy," DesRosiers Automotive Research said in a report this week.

Almost 850,000 small, so-called entry-level vehicles will be sold in Canada when the final 2008 sales tallies are compiled, the consultancy said.

Analysts have argued many of the vehicles built in China's factories are not yet ready for prime time in the West because they must meet tougher safety and emissions regulations than in their home market. Brilliance Auto's BS6 car, for example, failed crash tests in Germany in 2007.

But it is the higher standards of buyers in Canada and the United States that will stop an immediate push by Chinese companies northward, said Pascual Francisco, senior market analyst for Latin America for IHS Global Insight. Chinese companies are still several years away from widespread selling in those two countries because they would fail to compete there, he said. "They must improve quality first."

FAW Mexico's Web site urges taxi operators to consider its F4 sedan at a price of 819 pesos a week, or $73. Its cheapest car, the F1 hatchback, can be bought outright for 75,900 pesos, or about $6,550 at yesterday's exchange rates.

China's central government, which controls FAW, has been pushing the export of Chinese-made vehicles. The cars have made their way into the Middle East, the former Soviet block countries, North Africa and Southeast Asia.

A pullback by increasingly frightened consumers in Canada and the United States, and the worst financial crisis since the Great Depression, has led the Chinese carmakers to take a less aggressive approach toward North America, said David Zhao, a Toronto-based research analyst at Frost & Sullivan's Automotive Practice.

Total industry demand for the two countries is expected to be 13.47 million vehicles in 2009, a 10% drop from 2008, according to Scotiabank Group.

"The demand is quite unstable," Mr. Zhao said. "FAW and other Chinese automakers are still implementing their globalization plans. But since the current financial crisis hit, their plan might be adjusted. For the moment, they still want to stay within the Mexico market. They want to accumulate experience."

FAW is building a car assembly plant in Mexico. "Frost & Sullivan believes this is the first step for FAW products to enter the U. S. market," it said in a report last year.

Other Chinese carmakers have hit their own hurdles in penetrating North America. Chery Automobile Co. aborted its effort to sell cars in the United States in the near term after a manufacturing deal with Chrysler LLC was iced.

New Jersey-based importer Chamco Auto, which claimed at the Detroit Auto Show one year ago that it would begin selling vehicles made by Chinese manufacturer Hebei Zhongxing Automobile Co. at rock-bottom prices in Canada in 2009, has been plagued with legal problems. It is now working toward a Mexico launch.

http://www.financialpost.com/story.html?id=1158842

F4 sedan

F1 hatchback


 

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Discussion Starter · #12 ·
FAW's Mexican factory canceled.

According with mexican cars website autocosmos the building of the factory was cancelled, up next the full aticle translated:

Chinese auto brand FAW and Grupo Salinas had cancel ensambly plant project in Michoacan due financial crisis.
In november 2007, the first stone of the facility was put by Mexico's President and FAW representatives. Such facility was a joint venture with Mexcian Grupo Salinas (Salinas Group) for the comercialization of the cars at Elektra stores network.
Since November 2007 to the date poeple from Zinapecuaro informed even that first stone was removed and there was no intidiation ir intntion to build. Everything indicates that Salinas Group observed the cars were not wht they expected as brand and the sales in "smal payments" didn't work, besides entry models quality didn't fit mexican buyer expectations.


Is far to say that Salinas Group take some wrong steps:
a) They never lended cars to specializaed press, wich give the impression that the cars were so bad that they didn't want anyone to test them.
b) No FAW dealer were open in Mexico city (biggest car market in the country) only a few Elektra stores had cars to show.
c) No FAW mechanical shops were stablished, cars service would be provided by a third party whom didn't have a broad network nationwide.
d) Potential buyers had just two choices to buy, cash or a loan provides exclusively by Salinas bank "Banco Azteca"
e) The only insurance option was provided by (you guess) Salinas own insurance company "Seguros Azteca"

All those factors sealed FAW's faith in Mexico.

You can read the full article in spanish at the next link http://www.autocosmos.com.mx/notici...lanta-de-faw-en-mexico-ha-sido-cancelada.aspx
 

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Re: FAW's Mexican factory canceled.

Thanks for that FAW Mexico progress report Olyn....
That's hard luck for FAW. But there were precedents set as Geely, Chery (in its Chrysler tie-up), and Zhongxing have all canceled plans to enter Mexico. Only Chang'an which plans production by late 2009 or early 2010, remains a possible player there.

FAW and Grupo Salinas even hired a high profile CEO, Kathleen Ligocki, former CEO of Ford Mexico, to steer the venture.

As for the quality problems, one report said 900 of the first 1,000 imported, broke down within 6 months. Yet this doesn't square with the kind of high marks that FAW Xiali has gotten from J.D. Power in its China-based surveys.

Penetrating the border into the U.S. is becoming even more difficult for car makers with high hopes.
 

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Discussion Starter · #14 · (Edited)
FAW about to lose permission to import cars to Mexico

Mexico's automobile bill demands any automaker from a country with no Free trade agreement to build a factory in MExico with a minimun investment of $150,000,000 UDS and a minimum production of 100,000 cars by year within 3 years.
Since FAW stoped its auto plant construction and has no plans to restart is violating the bill.
Today mexican finantial website CNNEXPANSION publishes declarations of Mexican heavy industry and high technology director Adalberto González (an office from Mexican Economy Ministery) who says Mexican government is studying the possibility of cancell FAW's permission to import cars. Closing the first chinese autobrand stablished in NAFTA area, the report has no conclusive information, also says nothing about import autoparts for the existing cars.
http://www.cnnexpansion.com/negocios/2009/07/15/gobierno-evalua-quitar-permiso-a-salinas
 

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Chinese carmaker FAW leaving Mexico market

October 18, 2009
First Auto Works (FAW), the first Chinese automaker into the Mexico market, is on its way out after only a year. In partnership with Mexico's powerful media and retail company Grupo Salinas, FAW had intended to import vehicles from China. A corollary plan was to build a new facility in southern Mexico to supply the rest of Latin America. Today all the plans have been canceled.

Grupo Salinas said three months ago that it was stopping construction on the plant. At the time, work was barely underway. Instead, the company said, it would import vehicles from FAW, along with other Chinese brands including Geely, and distribute them through its own Elektra retail chain. Banco Azteca of Salinas was to facilitate financing to non-credit-worthy customers.

Although the plan seemed airtight, even Ricardo Salinas-Pliego of Grupo Salinas, number 124 on the Forbes magazine billionaires list, couldn't get the Mexican government to twist the country's foreign investment policy to favor him. Mexico requires any company with plans to sell its vehicles in the country to invest at least U.S. $100 million on a manufacturing facility to produce at least 50,000 units annually. Considering how low demand was, with about 5,000 vehicles sold in a year, Grupo Salinas could not make such a commitment.

Any exception for Salinas-Pliego would have set a precedent against its own industrial policy, which is currently enforced by major global powers including Chrysler, Daimler, Ford, General Motors, Honda, Renault-Nissan, Toyota and Volkswagen.

Now First Auto Works, which has joint ventures in China with Volkswagen and Toyota, will have to rescind its partnership with Salinas, pack up and leave.

FAW had become the only Chinese OEM to land a plan to build a manufacturing facility in Mexico. Several companies intended to take advantage of the country's membership in NAFTA and eventually export cars to the U.S. free of import duties. First Auto Works was believed to be the first of these companies of a new generation.

Inside Line says: Maybe for awhile the North American market will have the same players as today. But the traditional auto companies will have to find a way to compete against newcomers once the Chinese presence becomes a reality.

http://autonews.gasgoo.com/auto-news/1012579/Chinese-carmaker-FAW-leaving-Mexico-market.html
 
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