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August 15, 2007

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China's "Big Three" automakers boost their own brands

By Joanne Jiu From: www.gasgoo.com

All along the world's large automakers who are vying for larger Chinese market shares, China’s home-grown auto companies such as Chery Automobile, Geely and Brilliance are also growing fast. However the so-called China's "Big Three " automakers seem left behind.

FAW own Hongqi Brand

Realizing all this, the "big three"-- First Automobile Works (FAW) Group Corp., Shanghai Automotive Industry Corp. (SAIC) and Dongfeng Motor Corp.(DFM) are picking up speed.

The three largest state-owned auto groups that cover 50 percent of China auto market are investing RMB 44.3 billion ($58.5 billion) to create their own brands after cooperating with the foreign automakers for years.

FAW to invest 13 bln Yuan

FAW, which ranks 385th on Fortune 500 list of 2007, plans to invest 13 billion yuan(about $1.7 ) into its own-brand car project by 2015.

FAW, a partner with Toyota and Volkswagen for years, has launched its independent brand of " Hongqi", meaning red flag, but the company eyes further on the own-brand road.

According to its announcement on 15th July, FAW will spend 13 billion Yuan over the next eight years to create four sedan platforms, on which fifty vehicles will be developed.

Currently, FAW's self-developed engines have been put into production at its Tianjin factory. From next year, the largest Chinese automaker will release one new model on its own each year. The annual output of its own-branded sedans will reach one million units.

SAIC to invest 21.355 bln Yuan

SAIC, ranked 402nd in the Fortune 500 list this year, announced a plan to invest 27.36 billion Yuan to develop its own-brand Roewe sedans, pay off debt and expand commercial vehicle production. And recently it sells as much as 8 billion Yuan, or $1.06 billion, of bonds to help finance its projects.

SAIC is set to invest 21.355 billion Yuan, or 2.82 billion in US dollars into its SAIC Motor Tech Centre, which focuses on the R&D of its own-branded vehicle and alternative energy solution.

SAIC's Roewe sedan is based on design rights obtained by the automaker after the collapse of the British automaker MG Rover Group. SAIC released the Roewe 750 at the Shanghai auto show during March, and then sold over 10,000 Roewe 750 sedans till today.

The automaker expects to sell a total of 600,000 own-brand vehicles by 2010.

DFM to invest 10 bln Yuan

DFM’s first step was the creation of their Department of Passenger Vehicles. The department was officially established in late July, at Wuhan City. DFM invests nearly 10 billion Yuan ($1.32 billion) in this department, a landmark move that signals DFM’s determination to walk away from its sole production of foreign-brand sedans.

DFM has invested 7.6 billion RMB ($1.0 billion) in the new sedan production base in Wuhan, which is set to break ground this September. The project consists of two stages: the first stage of the project will be completed by 2008 with an investment of 3.6 billion Yuan; the second stage will start in 2010 with around a 4.0 billion Yuan investment.

In addition,, DFM will begin construction of a new R&D centre for DFM's brand sedans in 2008. The project will be completed and operational by early 2010.

DFM brand vehicles, insiders say, will have European characteristics. It will most likely be classified as a B-segment family sedan, and will most likely have either a 1.6L to 2.0L engine.

DFM has joint ventures with Honda and Nissan.

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August 13, 2007

Photos: Gasgoo

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