Posts Tagged ‘Chinese Auto Market’

VW Builds Up Edge over Rival in China

Success in Asia helping maker to be largest in world.

by on Sep.23, 2014

Volkswagen AG’s various operations in China have combined to build up a significant lead over rival General Motors even as both companies chalked up double-digit sales increases during the first eight months of 2014.

Volkswagen's plants in China are still churning out new vehicles as the maker enjoyed a double-digit sales increase through August.

The VW Group’s Chinese sales have grown by 16.5% so far this year and now total 2.4 million units, giving VW a lead of roughly 140,000 units over its chief competitor. The strong sales in China also have helped the VW Group increases sales so far this despite what Christian Klinger, the executive in charge of VW sales worldwide, described as a “tense economic environment.”

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So far this year, sales the VW Group, which includes VW, Audi, Porsche, Skoda, Seat, Lamborghini and Rolls Royce, are up 5.6%. (more…)

Ford Pumping $500 Mil into Engine Plant in Bid to Grow Chinese Share

Late to market, Ford paying a steep price to catch up.

by on Jun.17, 2011

Ford's new engine plant will help support the rapid growth of its Chinese product line-up, which now includes models like this Mondeo.

Changan Ford Mazda Automobile, Ford Motor Company’s passenger car joint venture in China, has launched construction of a new, state-of-the-art engine plant in Chongqing. The $500 million investment will more than double CFMA’s annual engine production capacity in China to 750,000 units when it comes on line in 2013.

Along with a variety of other moves, including plans to add a second assembly plant to support the addition of 15 new products, Ford is working hard to establish itself in China.  The maker was initially reluctant to enter what has now become the world’s largest automotive market – and is paying a price for that delay.  Ford currently holds less than a 3% share of the Chinese market while that country’s top maker, General Motors, has a 15% share.


“Today’s ground-breaking ceremony represents yet another milestone in Ford’s accelerated expansion plan for China. This plan reinforces our commitment to aggressively grow the Ford brand in China and offer a full range of exciting, fuel-efficient vehicles to Chinese customers,” said Joe Hinrichs, president of Ford Asia Pacific and Africa.


China Critical to Ford’s Future

Maker struggling to catch up to key competitors, GM and VW.

by on Apr.18, 2011

Ford showed the Start Concept at Beijing, last year.

Chinese car buyers will get their first good look at the new Ford Focus, this week, at the biennial Shanghai Motor Show.  The compact model is a critical part of the maker’s global OneFord strategy – but could be even more crucial if Ford hopes to finally gain some traction in the world’s largest and fastest-growing automotive market.

The Detroit maker, which has been building momentum in the U.S., Europe and some of the other key emerging markets, continues to struggle in China, where its share lags not only market leaders like General Motors and Volkswagen, but even relative newcomers such as Hyundai.

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But with a planned marketing blitz that includes the Focus and a wide range of additional products, Ford executives insist they can make up for lost time.

“Together with our partners, we are leveraging the strength of the One Ford plan and our global platforms to bring 15 new vehicles to China by 2015, reinforcing our commitment to offer a full portfolio of vehicles for our Chinese customers,” said Joe Hinrichs, president, Ford Asia Pacific and Africa.


Ford Will Build a Second Engine Plant in China

Chinese industrial policy prompts $500 million JV reinvestment.

by on Sep.27, 2010

Reinvesting in China is mandated by an industrial policy that in practice requires it .

Ford Motor Company and its government dictated partners are building new engine plant in China that is due to open in 2013. With the additional capacity of 400,000 units at the new facility, Ford’s joint venture, Changan Ford Mazda Automobile Ltd (CFMA), is more than doubling its existing engine capacity of 350,000, to 750,000 engines annually.

Ford Motor Company CFO Lewis Booth joined Chongqing Mayor Huang Qifan, Chongqing New North Zone Administrative Committee Director Xiong Xue, Chongqing Changan Automobile Company chairman Xu Liuping, as well as Ford China chairman and CEO Robert J. Graziano in Chongqing at an official signing ceremony over the weekend.

China is now by far the world’s largest auto market, and Chinese industrial policy in effect requires that all profits earned there are reinvested in the country and its local partners. The U.S. remains alone among industrialized nations – with elected or totalitarian governments – without any such job and investment protecting policy.

The $500 million (RMB 3.4 billion) investment will be funded entirely by CFMA and will be located in Chongqing’s so called New North Zone.


Chinese Auto Financing Business Booming

GMAC-SAIC sets record monthly contract volume.

by on Sep.14, 2010

World's largest auto market soon to be largest finance market as well?

Traditionally the new vehicle market in China was dominated by cash transactions. However, the Chinese desire for vehicles bought on credit might not be all that different than elsewhere. GMAC-SAIC Automotive Finance Co., Ltd. (GMAC-SAIC) today announced that it booked a monthly record for retail s in August, or more than 18,000 retail contracts in August.

China of course is the world’s largest auto market. GM and its joint ventures sold a record 1,826,424 vehicles in China in 2009.  GM ended 2009 number one among global automakers for the fifth consecutive year. With Chinese sales of 1,567,411 units through August 2010, GM is on track to remain number one in 2010.

The joint venture between Ally Financial Inc., Shanghai Automotive Group Finance Co., Ltd. and Shanghai General Motors Co. Ltd.,  has now  signed more than 109,000 retail loan contracts during the first eight months of 2010, which exceeds the 2009 full year total. Chinese industrial policy requires automakers to establish joint-ventures with local companies and reinvest profits in China.

“We are very pleased with yet another year characterized by strong business growth. Surpassing 100,000 retail contracts at this point of the year represents a significant milestone for not only us, but for the whole automotive finance industry in China,” said Rick Livingood, general manager of GMAC-SAIC.


Chinese Government Focused on Hybrids and EVs

Western makers will provide the R&D for technology that China will ultimately own and possibly export.

by on Aug.11, 2010

The masters of the Middle Kingdom have big plans for hybrids and electric Vehicles.

It’s no secret that indigenous Chinese automakers are not competitive with western ones when it comes to existing manufacturing prowess, quality and vehicle design.

That’s the reason the Communist party with its lock on the Central Government in Beijing made a series of industrial policy decisions during the past two decades that forced the most successful foreign automakers and suppliers to establish joint ventures, if they wanted access to what is now the world’s largest vehicle market.

It is arguably the world’s largest self help program, with the express goal of becoming competitive in the auto business without requiring the more than 100 years of learning accrued in the west.

Beijing leaders are now looking at and taking decisions on the next steps – how to establish leadership in emerging technologies that the Chinese can dominate in the home market and export globally, as China consolidates the industry and forces the foreign companies into smaller roles. (more…)

Jiangling’s New Plant to Make Fords, Subarus

An investment of $300 million will add 300,000 annual capacity to the already booming Chinese market.

by on Jul.20, 2010

A small but potentially importand player in the Chinese comercial vehicle marekt is expanding.

Jiangling Motors Corp (JMC)  broke ground over the weekend for a new $300 million assembly plant in Nanchang, Jiangxi Province, 775 km southwest of Shanghai.

The plant will have the capacity to produce up to 300,000 vehicles per year when it opens in 2012.

Jinagling will make both the Ford Transit and Maverick models (Yihu in China, Escape in U.S.), and a JMC- branded car, the Yusheng.

JMC is 30% owned by Ford.

The company is also said to be in discussions with Subaru to produce the Forrester SUV model in China.

VW Signs Contracts for another Chinese Plant

Another 300,000 vehicles annually from Eastern China.

by on Jul.16, 2010

The biggest maker in China plans to get bigger.

The Volkswagen Group will build a new vehicle production plant in Jiangsu Province, China. The contracts were signed today by Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft, and Dr. Winfried Vahland, President and CEO of Volkswagen Group China, together with representatives of Shanghai Volkswagen.

The plant in Yizheng, Eastern China, will start operating in 2013 and has a maximum annual production capacity of 300,000 vehicles.

VW is already the largest maker in China, and it will double production capacity there to 3 million vehicles by the end of 2014.

“China is one of the most important automotive markets of the future and a dynamic growth driver for the Volkswagen Group”, Heizmann said at the signing ceremony. “Together with our Chinese partners we plan to double our production capacity to three million vehicles by 2013/14.”


“With more than 950,000 vehicles delivered in the first half of 2010, Volkswagen Group China has exceeded deliveries in the record year of 2009 by 45.7 percent”, Vahland added. “This strong performance further confirms the success of our young and efficient model range. The new plant in Yizheng makes sure we will be able to meet growing demand from our Chinese customers in future, too.”


Li Shufu to Become Chairman of the Board at Volvo

Hans-Olov Olsson Named Vice-Chairman in peace offering.

by on Jul.15, 2010

"We have made significant progress in assembling the team that will develop Volvo Cars under Geely's ownership."

Zhejiang Geely Holding Group Co., Ltd. today announced Li Shufu, its Chairman, will become Chairman of the Board at Volvo Car Corporation upon its acquisition of Volvo from Ford Motor Company.

Geely also named Hans-Olov Olsson as Vice-Chairman at Volvo Cars. Olsson is a former President and Chief Executive Officer of the Swedish automaker. Olsson was an adviser to Geely on the transaction.

How long the 68-year old Olsson will stay in the newly created position is unknown.

Nevertheless, the move is clearly an attempt to assure Swedish doubts about the sale, and ensure a smooth transition from Ford ownership when the deal closes during the third quarter of 2010. Ford will not retain any ownership in the new Chinese company.

“We have made significant progress in assembling the team that will develop Volvo Cars under Geely’s ownership. Today’s board appointments underline my personal commitment to this famous company,” Li Shufu said.

While the difference between U.S. cultural attitudes of Ford management and Swedish attitudes were significant, it is nowhere near as vast as the differences between the Chinese “middle kingdom” and “Konungariket Sverige.” Whether the Chinese can manage to make Volvo a growing and profitable global car company remains to be seen, and is the subject of great debates among industry observers.


For the moment, Volvo production in Gothenburg, Sweden and Ghent, Belgium is secure. It remains to be demonstrated that Geely can successfully build Volvo’s in China to Volvo’s quality and safety standards.


China Extends Old-for-New Incentives

Effort to maintain momentum as economy shows signs of trouble.

by on Jun.21, 2010

Chinese makers could benefit big from an extended cash-for-clunkers program.

China’s Ministry of Commerce, hoping to forestall a potential slump in the country’s automotive market, have decided to extend their own version of the cash-for-clunkers program.

The “old car for new” subsidy, which expired on May 31, will now run until at least the end of the year, and provides cash incentives of up to $700, or 6,000 yuan, for those who trade in an outdated vehicle for a new model.

While the program is designed to maintain momentum in the car market it has a secondary purpose, much like America’s clunkers program, which was intended to help rid the roads of old, fuel-guzzling, smoke-spewing vehicles.

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That’s even more important in China, which is only now ramping up its vehicle emissions standards to world-class levels.  Most older models don’t come close to meeting today’s smog rules, a particular problem in pollution-choked cities like Shanghai and Beijing.