FAW to complete auto range with Mazda MPVs.
From:Shanghai DailyAugust 25, 2008 - FAW Car Corp, the partner of Japan's Mazda Motor Corp, on Friday announced it would invest 293 million yuan (US$43.2 million) to locally produce Mazda multi-purpose vehicles (MPV) to complete its product portfolio.
The listed unit of China's second-biggest car maker, FAW Group Corp, plans to make 20,000 Mazda-branded MPVs starting from next year after pouring money into new equipment and upgrading existing assembly lines in a plant in Changchun, it said in the latest filing to the Shenzhen stock market.
The move is expected to help FAW win more customers with a complete product line-up. It is now mainly partnered with Mazda to produce the Mazda 6 mid-to-high class sedan, which has been challenged by more competitive rivals such as Toyota's Camry and Honda's Accord.
Although the niche market segment accounts for a small proportion of the overall vehicle market, analysts said it would sustain growth in China's increasingly affluent society.
Half-year sales for MPVs added 4.09 percent to 111,400 units in China, according to the China Association of Automobile Manufacturers.
The expansion plan came after FAW Car reported its half-year earnings had more than tripled to 506 million yuan, due to sustained growth of the overall auto market and cost reductions. Its sales revenue increased by 76.16 percent to 10.4 billion yuan for the first six months from a year earlier after it sold 59,300 vehicles during the period — an increase of 75 percent.
FAW Car also projected slower profits for the second half of this year due to declining car prices and intensified market competition. It plans to launch two new models, including the M6 mid-class sedan and Besturn B50.