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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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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 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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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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