|
China, the world's fourth auto manufacturer
(An article from People's Daily on Jan.16 - 2004)
As learned from the Forum of China Auto Industry Growth Potential and External Development Environment, in 2003, China turned out 4.44m vehicles and sold out 4.37m, an increase of 36.6 percent and 34.5 percent respectively over the previous year. Among them, there were 2.01m cars with 1.97m. of them sold, up 84.4 percent and 80.7 percent respectively. China has outrun France to become the world's fourth large auto manufacturer. As learned from the Forum of China Auto Industry Growth Potential and External Development Environment, in 2003, China turned out 4.44m vehicles and sold out 4.37m, an increase of 36.6 percent and 34.5 percent respectively over the previous year. Among them, there were 2.01m cars with 1.97m. of them sold, up 84.4 percent and 80.7 percent respectively. China has outrun France to become the world's fourth large auto manufacturer. Although the rise of commercial market of vehicles fell back in 2003 because of the SARS, the robust growth of the car market pushed China's auto industry onto a fast track. The auto industry continued to be the powerhouse for boosting the national economy with sustained, rapid and healthy development.
The forum, sponsored by the Development Research Center of the State Council and hosted by Volkswagen China Investment Co., Ltd., unveiled the "Forecast on Demand in China's Auto Market" prepared by the Economic Research Section of the Development Research Center under the State Council. The report forecasts a decline for the expansion of the domestic auto market and a sustained, stable and fast growth for 20 years or even longer. However, the mid-and-long term upturn is expected to keep on. According to a conservative estimation, by 2010, 14.66m. of sedans will be held by families in China with about 14m. by urban and town households. By 2020, people in China will have 72m. cars. Sedans will be the most important driving force to boost the growth of cars and the whole auto industry at large. 
China reports over 96 mln automotive vehicles in 2003
(People's Daily on Jan.16 - 2004)
China registered more than 96 million automotive vehicles in 2003, up 21 percent year-on-year, according to statistics released by the Ministry of Public Security Saturday. China registered more than 96 million automotive vehicles in 2003, up 21 percent year-on-year, according to statistics released by the Ministry of Public Security Saturday. This includes 24 million autos and 59 million motorcycles, a rise of 13 percent and 17.7 percent respectively over the previousyear. Meanwhile, China reports 12 million private cars in 2003, an increase of 24.8 percent over 2002. Statistics also show that by the end of 2003, China had reported 102 million drivers, representing a yearly increase of 12.4 percent.
Auto joint ventures come to a crossroad in China
Some say since we can generate profits and taxes and we can create employment opportunities what's the point of going after brands and technologies? We would rather "copy them" than waste time in exploiting new products and fostering brands while letting market opportunities slip away. Whether to make a breakthrough in brands and technology by making more efforts or lying down to become the assembling factory of others, automobile joint ventures have come to a crossroad.
According to a foreign medium the president of Nissan, Carlos Ghosn recently said that the contribution by its partner Dongfeng in the area of sedan-cars was almost none. Shortly afterwards Nissan clarified by saying it was fabricated by reporters. Yet through this we can feel indistinctly the position of the Chinese automobile industry in the mind of transnational corporations. Though transnational companies have strengthened the partnership and cooperation with Chinese automobile industry over the past two years since China joined WTO, although more and more new models and new technologies in line with the world have been brought into China and the sales volume and profit-earning of Chinese automobile companies keep on increasing we have to admit, when pondering over joint venture history of the 20 years in the past the Chinese partner's right to speak still remains inaudible.
Big Chinese automobile companies with strength have already entered into partnership with foreign capitals one after another. Some even selected more than two partners. The late-coming auto tycoons have to choose among relatively smaller companies. These companies, in order to take a share in the rapid-expanding market, were ready to lower their negotiation weight. The result was joint venture agreements with much loosened reservation point of cooperation. Though the shareholding ratio was still 50 to 50 yet the right to speak on the part of Chinese partners was compromised. The plight of the right to speak also exists in old joint ventures. In the past disputes between the partners were centered round the upgrading of models, authentication of spare parts and so on. Now competition is heated up and it is the foreign capital who suggests the localized production of new model. In the meantime joint ventures themselves are equipped with spare part authentication ability. However the disputes about the right to say has not only not been eradicated but have extended to the key areas including the setting of new model prices, the standard fee charging for technology transfer and the acceleration of key technology transfer.
Last year certain new products of the transnational corporations failed in Chinese market. In such areas as new model selection and marketing strategies the Chinese partner who is more familiar with local market is now supposed to have more authority than it ever had before. Regrettably the self-confident transnational partners still believe that they are more experienced in the decision of matters of key importance. The president of a transnational corporation once said they knew they were in a country totally different from his and were unfamiliar with the Chinese market, but they would introduce more localized talents into their agencies in China and emphasize the work on abroad training. Therefore the final decisions regarding models and marketing strategies would still be left in the hands of foreign partners. The reason that Chinese partners lack of the right to speak is, to speak the truth, due to their own inadequacy. Their large amount of yearly earnings is from products whose brands and key technology are granted by the foreign partners. Even if the Chinese partners were the holding company instead of 50 to 50 it would still be the foreign partner who took control.
Some say since we can generate profits and taxes and we can create employment opportunities what's the point of going after brands and technologies? It is not that the viewpoint holders do not wish to see Chinese auto companies with independent brands and intellectual property rights grow stronger. It is only because to fill up the gap of brands and technologies is too hard a job for them. We would rather "copy them" than waste time in exploiting new products and fostering brands while letting market opportunities slip away. Granted that China - the largest auto market of the world did make it possible for Chinese auto industry to become the processing factory of transnational corporations, processing however is only a link in the chain of auto industry - a very thin-profit link indeed. Chinese auto industry, with a massive market to support it, is entirely possible to provide full value chain service. Whether to make a breakthrough in brands and technology by making more efforts or lying down to become the assembling factory of others, automobile joint ventures have come to a crossroad. (People's Daily on Jan.18)
China's auto demand to reach 20 mln in 2020
China's demand for automobiles in 2020 is expected to reach 20.74 million units, including 20.43 million sedans, and the total number of cars in China by then willtop 156 million, reported Tuesday's China Automobile News.
China's demand for automobiles in 2020 is expected to reach 20.74 million units, including 20.43 million sedans, and the total number of cars in China by then willtop 156 million, reported Tuesday's China Automobile News. The paper quoted the Development Research Center (DRC) of the State Council, China's cabinet, as saying that the forecast was given on the basis of an eight percent GDP growth rate.
China will keep a sustainable, steady and rapid growth of sedandemand within the next 20 years or even longer, and household carswill become the most important pulling force for China's sedan sector and the mainstay of China's auto industry, the DRC predicted. Meanwhile, the growing disposable income for Chinese will serveas a driving force to boost China's sedan demands, the DRC said. Statistics show that in the past year, China produced 4.44 million autos and sold 4.39 million, a net increase of over 1.1 million for both, or a yearly rise of 35.2 percent and 34.21 percent respectively. In 2003, sedan production registered a record two million units,a net increase of more than 910,000 units, or up 83.25 percent year-on-year. Meanwhile, sedan sales reached 1.97 million, up 75.28 percent.
(People's Daily on Jan.23)
10% price reduction for Chinese sedan-cars forecast in 2004
According to latest data from online auto market database Chinese-built sedan-car prices saw an average reduction of 9.05 percent in 2003 which is followed by first price-reducing wave of 9.09 percent in the first 15 days after the New Year's Day in 2004. Experts predicted that the price-reduction record set in 2003 for China-built automobiles would be broken through again in 2004.
According to latest data from online auto market database Chinese-built sedan-car prices saw an average reduction of 9.05 percent in 2003 which is followed by first price-reducing wave of 9.09 percent in the first 15 days after the New Year's Day in 2004. Experts predicted that the price-reduction record set in 2003 for China-built automobiles would be broken through again in 2004. China Association of Automobile Manufacturers (CAAM) for the first time announced the exact statistics of 2003's auto industry sales volume on Jan. 16. Last year Chinese auto production and marketing both topped 4 million. The number indicated 4.4437 million and 4.3908 million respectively. Among them the production of sedan-cars were 2.0189 million - up 83.25 percent and the sales were 1.9716 million - up 75.28 percent. According to Zhu Yiping, Director of Information Department of CAAM, the production and marketing of Chinese automobiles increased by 1,192,500 as compared with that of 2002. The speed was unprecedented in the world history of automobile development. All signs indicate that Chinese auto industry will keep a rapid growth this year. The prediction made by CAAM on 2004's auto sales was 20 percent higher than the sales in 2003 and the production and marketing would exceed 5.3 million. Sedan-cars would still be the driving force in this rapid growth and its production in 2004 would exceed 2.6 million.
The bright prospects in both production and marketing heartened the auto manufacturers who hold ambitious development plans. According to preliminary statistics sedan-car manufacturers planned to produce about 2 million cars in 2004. Geely, Beijing Hyundai, Chery and Guangzhou Honda expected to increase production by 50 percent. But the reality is: stock began to grow noticeably since the latter half of 2003. National auto market began to cool down in December 2003. If the market does not take a turn for the better in the fist half of this year whether auto sales will keep a rapid growth rate is still in question. Manufacturers' excessive production capacity would further increase stocks in the storage and they have no way out but to battle over prices in order to digest the output and retain the occupancy of market share. Mr. Su Hui, General Manager of Asia Sports Village (Beijing) Automobile Trade Market (ASVATM), said based on the trend at the beginning of this year auto manufacturers and dealers would continue to use price reduction as means for seizing the market this year. The most illustrating example is Lingyang (Antelope). Shortly after its price reduction on the New Year's Day its sales shot up and the sales volume of last week soon climbed to the second place in ASVATM Top Single-week Sales List. Qianlima (Swifthorse) has been out of stock since it reduced the price of 2004 model.
According to Hua Xue, competition over prices in 2004 would still be the major strategy that auto manufacturers use to keep and expand their market shares. It is estimated that the price reduction of China-made automobiles would be around 10 percent or even higher. Some models will go far beyond that estimation. Also some will be ousted from the market through fierce competition. (People's Daily on Jan.21)
New auto rules state joint venture guidelines
The National Development and Reform Commission Tuesday launched a long-awaited new policy for China's fast-growing auto industry.
The new policy release comes just a year after the commission, one of the major watchdogs for the auto industry, issued a draft policy seeking public opinion.
The new auto policy will substitute for the old one issued in 1994 by the State Council, China's cabinet. It will both loosen and tighten restrictions on foreign investors in the auto industry from different perspectives. Foreign investors will be allowed to control stakes of more than 50 per cent in automobile and motorcycle joint ventures (JVs) with Chinese partners "if their JVs are built in China's export processing zones and shoot at overseas markets," the new policy states. Japan's Honda Motors has a 65 per cent share in a JV with China's Dongfeng Motor Corp and the Guangzhou Automobile Group. All cars to be produced by the JV, located in the export processing zone in Guangzhou in South China's Guangdong Province -- will be exported. The new policy will permit foreign investors to create more than two JV plants in China to produce same categories of vehicles, if they join forces with their existing Chinese partners to merge other companies in China. General Motors (GM), the world's No 1 automaker, has four car JVs in China through mergers of local companies jointly with the Shanghai Automotive Industry Corp(SAIC) -- one of China's top three automakers. Big Chinese automakers will be encouraged to team up with foreign partners to merge both domestic and foreign vehicle producers to "expand business boundaries in line with the auto industry's globalization," according to the new policy. SAIC in late 2002 joined hands with GM and Japan's Suzuki to take over South Korea's Daewoo Motors. This is the first overseas auto merger involving a Chinese vehicle maker. The new policy also expects some internationally competitive Chinese automakers to join the ranks of the world's top 500 multinationals by 2010. SAIC, which also runs a JV with Germany's Volkswagen, has attempted to become one of the top 500. "These regulations are in accordance with the auto industry's latest development during the period after China's entry into the World Trade Organization and will speed up the restructuring of the fragmented sector," said Jia Xinguang, an analyst of the China National Automotive Industry Consulting and Development Corp. There are now some 120 vehicle plants in China. However, if a foreign automaker controls a relatively majority stake in another foreign firm, they will be treated as one entity when it comes to the requirement on the number of Sino-foreign JVs in China, the new policy states.
One of Chinese shareholders must have a stake bigger than the total of all foreign investors, if a Chinese listed automobile, motorcycle or other special-purpose vehicle producer sells its corporate shares, according to the new policy. "The two requirements are intended to protect Chinese automakers through measures not violating the nation's commitments to the WTO," Jia said. Foreign automakers appear cautious to comment on the new policy. "We are studying the new policy and not yet available for comment," said Ye Wen, a communications manager for Volkswagen's China operations. The new policy will enhance barriers on domestic non-auto investors in the industry.
Automakers in China that "could not maintain normal operations" will be forbidden to transfer their production permits to non-auto and motorcycle enterprises and individuals, it said. The State will encourage these automakers to regroup assets with other vehicle producers. If an automaker goes bankrupt, its production permit will be removed. State to ensure health of auto market.
The new policy said total investment of any new auto project should stand at 2 billion yuan (US$241 million) or more. Such a project must include a product research and development organization with an investment of no less than 500 million yuan (US$60.4 million). "The government hopes to use these regulations to cool overheating investment and overcapacity in the auto industry," said Yale Zhang, a Shanghai-based manager of CSM Worldwide, the US auto industry consulting firm.
"Plans of many non-auto enterprises in China, especially privately owned firms, to enter the industry will be derailed by these regulations."
The auto industry is widely seen as one of the overheated industrial sectors in China, thanks to massive investment from foreign automakers, and domestic State and privately owned enterprises. Total investment in building new auto-making capacity will amount to 216.6 billion yuan (US$25.5 billion) by 2007 in China, according to figures released by the commission earlier. Annual auto manufacturing capacity will total almost 15 million units in China by then. Sales of domestically-made vehicles grew by 34 per cent to 4.39 million units last year. The new policy also aims to foster a national united and open auto market mainly depending on private consumption.
All local governments will be forbidden to take discriminatory action on vehicles
produced in other regions, the policy said. "The State will carry out a national unified vehicle registering and checking system, and local governments cannot do likewise in their own ways," it added. The Shanghai municipal government still imposes much higher charges on private car buyers than in the other regions in China by auctioning car plates in an effort to control car sales and prevent traffic jams in the city.
Average charges for a car plate in Shanghai stood at more than 34,000 yuan (US$4,100) last month. A senior official from the Ministry of Commerce claimed around 10 days ago that Shanghai municipal government's action "violates related clauses of the law of road transportation security". But the municipal government said it will not mend its ways any time soon
(People's Daily )
No cigarette ads allowed at F1 Chinese GP circuit
No cigarette billboard will be erected at the circuit of Chinese Grand Prix of the Formula One motor racing at Shanghai, said the State General Administration of Sport (SGAS) on Thursday. No labels relevant to cigarette will be seen in VIP rooms at the circuit as well, the SGAS said in a response to a proposal setforth by Prof. Fang Jiqian, from Zhongshan Medical Sciences University in south China's Guangdong province and also a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC). Fang submitted the proposal against tobacco advertisement in motor racing to the CPPCC National Committee some time earlier. The source said the Chinese side of the Grand Prix organizing committee reached agreement after hard negotiation with the foreign partner.
The F1 race, which is sponsored mainly by tobacco companies, isscheduled to be held for the first time in China at the Shanghai International Circuit (SIC) from Sept. 24 to 26. China's oil giant Sinopec has replaced Marlboro to brand the Grand Prix, the SGAS source added. Cigarette advertising is banned by Chinese laws and the countryis a signatory of the World Health Organization's Convention on Tobacco Control. (People's Daily )
Chinese-made cars debut in US market
An Arizona car dealer is gearing up to become the first to sell a full line of Chinese-made vehicles in the United States at Wal-Mart-style prices he hopes will lure tens of thousands of buyers. David Shelburg and his privately held company, China Motor Corp., want to cash in on China's fast-growing auto industry and cheap labor costs by establishing a network of 100 dealers to sell vehicles from a trio of Chinese manufacturers across the United States by the fall. The plan is to have the dealers sell as many as 60,000 Chinese-built cars and trucks at prices starting below US$10,000, by the end of the year, Shelburg's business associates told Reuters. Shelburg, one of the first dealers to sell Subarus in the United States in the 1960s, hopes to establish himself as a discount king with business from California to Canton"It is going to happen," Shelburg's wife, Paula Shelburg, a corporate officer and board member China Motor, said in a telephone interview.. Analysts, however, are skeptical. They point out that most China-built cars have inferior quality, that U.S. standards for pollution and safety are rigorous, and that even established automakers have trouble in the U.S. market
Analysts said the 60,000 sales target for the last four months of the year, roughly equivalent to the pace of U.S. sales for household brands such as Subaru and Mercedes, is far too optimistic. Other global automakers, such as Italy's Fiat SpA, France's Renault SA and Korea's Daewoo Motor, have pulled out of the United States in recent years when sales plunged due to poor quality. Shelburg's company plans to import cars, SUVs and trucks made by Geely Automobile Holdings Ltd., Great Wall Automobile Holdings Co. Ltd. and Gonow, a manufacturer of motor-scooters that is entering the truck market. According to a J.D. Power & Associates survey, , a Westlake Village, California-based research firm that specializes in the Asian market, the quality of compact cars built in China was four times worse than those built in the United States, Dance said.Furthermore, David Shelburg has been barred from selling vehicles in Texas after a plan to sell Chinese cars there in the 1990s fell through, leaving some dealers empty-handed, a Texas official said. "He sold franchises to 15 dealers here and was never able to produce cars," said Carol Kent, director of enforcement for the motor vehicle division of the Texas Department of Transportation. "He's permanently barred in Texas." Paula Shelburg said her husband, who was in China on business last week and not available for interview, would clear his name in Texas. Shelburg's business is attractive to dealers because he charges a franchise fee of only around US$20,000, much lower than the US$100,000 or more charged by major automakers, said one Texas dealer who asked not to be named. Meeting U.S. safety standards will be a big hurdle, said Al Warner, director of the Office of Automotive Affairs for the U.S. Department of Commerce. "Safety technology is expensive. It's quite a trick (to meet the standards)," Warner said following a speech in Michigan on Wednesday. But China Motor officials said they were confident the Chinese cars would meet all U.S. standards and be ready for sale this fall. Regardless of China Motors' success, Warner said it was only a matter of time until the quality of Chinese vehicles improves and makes them marketable to U.S. car buyers. "There is a good chance that we will see good-quality vehicles from China in the U.S. -- and maybe sooner, rather than later," he said.
GM starts aggressive expansion in China
General Motors will relocate its Asia-Pacific regional headquarters from Singapore to Shanghai by January next year, GM Chairman and CEO Rick Wagoner announced Wednesday, June 23, in Shanghai. Establishing our regional headquarters in Shanghai recognizes how important China has become to our plans to expand our global industry leadership," Wagoner said. "Having a strong presence in this dynamic and growing market is not an option anymore, it's a necessity." Wagoner noted that the move will place GM's regional staff closer to the rest of the company's operations in northeastern Asia, which account for about 85 percent of GM's business. Those include GM Daewoo Auto & Technology Co. in Korea, and GM's partnerships with Fuji, Isuzu and Suzuki in Japan. Currently, GM operates six joint ventures in China with its strategic partner Shanghai Automotive Industry Corp. Group (SAIC), including the Shanghai GM Company Ltd. and the Pan Asia Technical Automotive Center (PATAC). GM has the broadest product portfolio and the second largest market share of any global automaker in the country. On June 7, GM announced that it would make more than 3 billion US dollars in new investments in China over the next three years. Troy Clarke, president of GM Asia Pacific, noted that China has become and is expected to remain the world's fastest-growing vehicle market for the foreseeable future. "We view long-term success and aggressive expansion in China as a key part of our future growth around the world." GM Asia Pacific expects to settle on the exact location of its new headquarters by the end of July and complete the move by January. GM has offered to relocate most of its Singapore staff of about 90 employees.
GM will maintain a strong presence in Singapore through GM Overseas Development Co. Singapore, which will continue to direct the sale and service of GM's growing lineup of imported vehicles in Singapore. GM Asia Pacific, the company's fastest-growing sector, has 22,600 employees in 14 countries from New Zealand in the south, to India in the west and Korean Peninsula in the north. The headquarters team oversees GM's business functions throughout the vast region including finance, product planning, communications, human resources, purchasing, public policy, legal and information systems and service. It was also announced on Wednesday that GM and Shanghai Automotive Industry Corporation Group (SAIC) will jointly invest about 2.1 billion yuan (approximately 250 million US dollars) in the next three to four years to upgrade their Shanghai-based Pan Asia Technical Automotive Center (PATAC) joint venture. The new investment will be used to fund the construction of a number of world-class facilities, including the largest professional proving ground in China. Wagoner said, "PATAC has played a critical role in GM's expansion in China by enabling GM China and our joint ventures to leverage the global resources of the entire GM Group and tailor them to the specific needs of our local customers." He added, "In order for PATAC to remain successful, it must continue to mature along with the domestic market. The new facilities will help ensure that PATAC remains the country's most advanced automotive engineering and design resource. At the same time, they will support GM and our joint ventures' continued industry leadership in China." PATAC's proving ground will cover more than seven square kilometers. Working with SAIC and GM's Global Proving Ground and Test Laboratory Council, PATAC is in the final stage of selecting a site. The facility will be the most comprehensive of its kind in the country, with straightaways, a ride and handling track, a dynamics pad, low-coefficient straightaways and a high-speed bowl and a durability road system. Among similar GM facilities, only the Milford Proving Ground in the US state of Michigan will be equal in functionality. "The establishment of the proving ground will serve as another milestone for China's automotive industry," said Wagoner. "It will not only satisfy the long-term product development and testing needs of SAIC, GM and our domestic joint ventures, but also greatly enhance PATAC's core strengths."
In the run-up to Auto China 2004, on June 7, GM and SAIC announced that PATAC would build several new facilities including the most advanced prototype laboratory in China; a virtual reality design studio that will be the first of its kind in China; a noise, vibration and harshness test lab; and a kinematics and compliance (K&C) lab. The new facilities are expected to be completed within two years. The new investment projects will be funded by earnings from GM and SAIC's joint ventures in China. PATAC, which opened in 1997, was the first Sino-foreign automotive engineering and design joint venture. Both GM and SAIC have 50 percent equity stakes. PATAC offers a range of automotive engineering, design and testing services. These include designing future-generation vehicles and components; providing complete engineering services for all types of motor vehicles; testing, tuning and validating vehicle systems, engines, chassis, transmissions, emission systems and whole vehicles; and engineering vehicle exteriors and interiors. With the support of GM and SAIC, PATAC is cultivating China's next generation of automotive engineering and design professionals. PATAC's workforce is expected to grow from over 670 at present to 900 by 2005 and 1,200 by 2010. PATAC also will continue to bring in experts from abroad to keep employees abreast of the latest industry concepts and processes. "From day one, GM has been focused on contributing to the complete and healthy long-term growth of China's automotive industry," said Wagoner. "As an indispensable pillar of our strategic partnership with SAIC, PATAC serves as an example of the successful cooperation between our two companies. PATAC will remain a key to GM's success in the high-growth China market and an important component of GM's global engineering and design network."General Motors, the world's largest vehicle manufacturer, designs, builds and markets cars and trucks worldwide, and has been the global automotive sales leader since 1931. GM employs 325,000 people around the world, including more than 11,000 in China.
GM today has manufacturing operations in 32 countries and its vehicles are sold in 192 countries. Insiders pointed out, in tandem with the fast growth in China's vehicle market and the huge growth potential of the market, competitions between multinational corporations for the China market is close to a boiling point, and they have expanded their presence from auto manufacturing to designing and development, professional fostering, sales and service and auto-related financial services in China. Recently, Volkswagen of Germany announced to make an extra investment of 6 billion euros in China and plans to raise auto production in China to 1.6 million annually. GM also has announced it would raise its auto production in China to 1.3 million annually. (People's Daily)
China adopts Euro II auto emission standards
China will adopt stricter auto emission standards equivalent to Euro II from Thursday in order to force polluters off the road, said the State Environment Protection Administration (SEPA) in Beijing Thursday. The new standards require a 30.4 percent cut of CO, a 55.8 cut of HC and NO, compared to the Euro I standards currently adopted in China, said SEPA vice-director Wang Jirong at a press conference. Wang said new motor vehicles failing to meet Euro II will not be registered by traffic enforcement departments. Manufacturing, sales and export of Euro I vehicles will be forbidden within one year.
Adopting Euro I standards in 2000, Chinese manufacturers abandoned models without exhaust cleaning equipment and jumped to Euro I models, updating technologies for 15 years. The government made the Euro II standards public in 2001 and promised a 30 percent cut of excise to qualified models. So far, 8,953 models have met the standards. Shanghai and Beijing adopted them in 2003, earlier than the rest of the country. "Euro II marks a new epic of China's efforts to reduce auto emission, but it is never the end of the road," Wang said, adding that SEPA has made new standards equivalent to Euro III and will adopt them nationwide in 2008. (People's Daily)
Auto parts industry facing difficulty in expansion
While automakers worldwide rushed to attend a closed biennial Beijing auto parts show earlier this month expecting continued dizzying auto growth in the market, China's auto components producers complained about slow growth and being squeezed out by foreign rivals. "Overall auto production has bright prospects, but auto components businesses are seeing increasingly narrower living space. We're suffering from challenges posed by international competitors," Tian Yushi, general manager of the FAW Fu'ao auto components company, told the media. Statistics from the Ministry of Commerce show that China's auto components import rocketed by 111.71 percent to 6.26 billion dollars in the first quarter of 2003, nearly three billion dollars more than the export volume during the same period. Bolstered by hefty auto growth, the number of engines imported in 2003 alone amounted to 374,000, a jump of 146 percent over 2002. However, China's auto components companies, long blamed for overlapped industrial capacity building and lack of technological innovation, failed to come up with high value-added innovative products to seize a sizable part of the lucrative market.
In 2003, the sales revenue of China's auto parts industry reached 300 billion yuan (36 billion dollars), accounting for one third of the sales volume of the entire auto industry that year. But foreign brands dominate the auto components market with products with high technological content such as steering gear, brake systems, transducers and other electronic components. "What China's auto components businesses can really develop by themselves is only stereos and horns," Tian even said. According to Zhang Xiaoyu, director of the China Society of Automotive Engineers (SAE-China), most Chinese auto components businesses are small in scale and only have a minor R&D investment,which has hindered their technological innovation. "China's auto parts industry lacks advanced electronic management technology," he said. "We have a long way to go in developing and producing advanced electronic products."The best way to catch up with foreign rivals is, he said, to introduce advanced foreign technology and cooperate with foreign auto parts businesses while expanding China's own R&D capacity. Besides, according to the policy for the development of China's automotive industry issued this year, he said, auto parts businesses should actively participate in R&D of auto groups.
"It is a tendency that the development of auto parts should keep pace with or outpace the development of autos," Zhang said. "But China's auto parts businesses have to go through a process of restructuring and reorganization before witnessing real progress."
(People's Daily) Mercedes-Benz focuses on the Chinese market
The global growth of car sales will undoubtedly be powered by a booming Chinese market, said a top DaimlerChrysler AG executive. According to DaimlerChrysler statistics, a total of 45 million cars were sold throughout the world last year. With the growth of sales slowing in Europe, North America and Japan which are the largest consumers of cars things have been picking up in Southeast Asia, Latin America and China . Annual sales globally are expected to reach 60 million units in the next 10 to 15 years, and China's booming market will contribute significantly to the growth, said Juergen Hubbert, a board member of DaimlerChrysler and chief executive of its Mercedes Car Group. At present, the world's 10 leading international auto giants have captured about 95 per cent of the global auto market. To survive and break new ground in the highly competitive sector, each is developing new products to meet the demands of customers. Following this tack, DaimlerChrysler AG the world's biggest car maker recently launched a new version of the Mercedes-Benz A-class to compete with luxury models from its rivals and boost profitability. The new model has two body versions, in addition to a versatile five-door version. Mercedes is also, for the first time in the model's range, launching a three-door model which will attract buyers through its sporty, youthful image, the company says.
"The new A-class is well on its way and is becoming profitable," Hubbert said during an interview with Chinese reporters at the A-class' premiere in Athens. The car, revamped but based on the original A-class that was introduced in 1997, will be available to customers in autumn and is expected to be more profitable. According to the company's latest report, the three-door A 150 version costs 17,632 euros (US$21,736) while the five-door version costs 18,502 euros (US$22,809). Mercedes will export the A-class to China. When asked if the model would be produced in China, Joachin Schmidt, Mercedes group's executive vice-president of sales and marketing, said Mercedes would follow a steady expansion in China and choose products which were more suited to the local market. The E and C-class sedans are core products of Mercedes. "We think these models meet the Chinese market and have development potential in China," Schmidt said. Hubbert confirm-ed that the company has received project proposal approval from Beijing Automotive Industry Holding Co Ltd to manufacture the C and E-class sedans in China. A new factory will be built by Beijing Jeep Corp, a joint venture established 20 years ago by Beijing Automotive Industry Corp and DaimlerChrysler. An initial annual production capacity of 25,000 C-class and E-class sedans will be realized by the new factory in 2005. Mercedes' high-quality products, international service standards and Chinese people's enthusiasm for its vehicles give Hubbert confidence when discussing sales in China. Mercedes, which started selling cars in China in the 1930s, has accumulated a rich marketing experience in the country, he said. At present, the company has 42 outlets throughout the country. With a sales target of about 14,000 units this year, up from 2003's 9,000 units, the number of outlets will increase to 50. Annual sales are expected to reach 50,000 units in the next five to 10 years, when about 150 outlets will be open. (people's Daily)
China's sedan sales drop for three straight months
China's sedan sales have dropped for three consecutive months, with the figures standing at 220,100, 177,700 and 167,300 units in April, May and June respectively, the latest statistics of the China Association of Automotive Manufacturers (CAAM) show. In June, China produced 215,600 sedans, up 2.5 percent over May, while sales dropped 5.8 percent. In the first six months, China produced 1.2461 million sedans and sold 1.132 million, up 36.4 percent and 31.6 percent respectively from a year earlier. China's sedan production and sales have maintained a high level for two years. In March this year, China produced 246,700 sedans and sold 226,200, both setting monthly records.
In June, China's auto production and sales reported 419,000 and 380,100 units respectively, down 1.41 percent and 4.06 percent over may, while up 21.5 percent and 7.3 percent over the same period of last year. From January to June, China produced 2.6771 million autos and sold 2.55336 million, up 27.1 percent and 24.15 percent respectively.
(People's Daily)
|
