AN AUTONEWS 04-14-08 D 1 AUTONEWS

© 2008 Crain Communications. All rights reserved. autonews.com

S U P P L E M E N T T O APRIL 14, 2008

2008Global automakers’ joint ventures • Domestic Chinese automakers

Vehicle production and sales data • Map of production facilities in China

Guide to China’s Auto Market

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2 0 0 8 G U I D E T O C H I N A ’ S A U T O M A R K E T

2008 GUIDE TO CHINA’S AUTO MARKET Automotive News • J.D. Power and Associates • Automotive Resources Asia

3

In the West, higher fuel prices areprompting drivers to log fewer milesand embrace smaller, energy-efficientvehicles.

Not so in China, where wealth generatedby the booming national economy hasmore than offset rising fuel prices.

In 2007, 5.2 million passenger vehicleswere sold in China, up 21 percent from2006, according to Automotive ResourcesAsia, a unit of J.D. Power and Associates.Gasoline-gulping SUVs enjoyed thestrongest growth, up 50 percent.

Auto prices across China dropped in2007 by an average of 5.7 percent, accord-ing to the China Automotive IndustryAssociation. Meanwhile, per capita in-come of urban residents increased 12.2percent from 2006, to $1,942.

The Chinese government maintainssome controls on fuel prices. The mostwidely used grade of gasoline was raised 8percent in November to the equivalent of$2.77 per gallon.

Meanwhile, the government repeatedlyhas said the domestic auto industry is fac-ing excess capacity. But automakers aren’tresponding to the pressure.

Almost all automakers are ramping upproduction and developing new models.In 2007, about 200 passenger-vehiclemodels were sold in China, double thenumber in 2005. The number will rise to250 in 2008, according to the forecastingfirm CSM Worldwide.

Meanwhile, some cash-rich nonauto-motive domestic companies want to enterthe market. In 2007, motorcycle makerChongqing Loncin Holdings said it wouldform a joint venture with the British com-pany Antonov to manufacture small auto-matic transmissions for passenger vehi-cles in China. The move was widely seenas Loncin’s latest attempt to transformitself into an automaker.

Thanks to stellar performances of newmodels, domestic Chinese brands andJapanese brands gained ground in 2007,largely at the expense of Korean brands.

The combined market share of Chinesebrands increased 2.3 percentage pointswhile that of Japanese brands rose 1.1 per-centage points. Meanwhile, Korean brandslost 3.1 percentage points.

Toyota closed the year with sales upmore than 60 percent over 2006. TheCamry alone contributed more than halfof the new volume.

By contrast, Hyundai group’s sales vol-ume tumbled 16.5 percent last year.

In 2007, Volkswagen was still the clearleader in China. Supported by its two jointventures — Shanghai Volkswagen Auto-motive Co. and FAW-Volkswagen Auto-motive Co. — VW held a market share of17.5 percent. It was followed by GeneralMotors with 10.1 percent.

Last year, the industry started what manyexpect will be a significant wave of consoli-dation among state-owned automakers. InDecember, Shanghai Automotive IndustryCorp. acquired Nanjing Automobile GroupCorp.

The Chinese auto industry is so compet-itive that various automakers, such asChery Automobile Co. and ChongqingLifan Industry Group, see overseas mar-kets as their best opportunity to grow.They are quickly building their presence inother developing markets, such as theMiddle East, North Africa and Russia.

Some Chinese automakers — includingGeely Automobile Holdings Ltd., BrillianceJinbei Automobile Co. and BYD Auto Co.— have displayed products at auto showsin the United States and Europe. But it iswidely thought that they still have a longway to go to succeed in Western markets,where quality and engine emissions stan-dards are much more rigorous than inChina.

— Yang Jian

As economy booms, consumerssnap up SUVs and luxury cars

42007 sales by brand

6Globalautomakers/joint ventures

19Map ofproductionfacilities inChina

20Domesticautomakers

30OEM suppliersin China

OnlineDownload this guidein pdf format atwww.autonews.com/chinaguide

ROGER HART

CHINA’S RIP-ROARING NATIONAL ECONOMY IS FUELING A GROWING AUTO INDUSTRYTHAT HAS SPAWNED EVENTS SUCH AS THE SHANGHAI AUTO SHOW, ABOVE.

Cover photo: Sports carspecialist Spyker Carsattracts a crowd to its standat an auto show in China. • Photo by Patrick Firouzian

Contents

SALES ON THE RISESegment sales of lightvehicles in China in 2007

2007 % CHANGESALES FROM

2006Microcar

329,000 0Subcompact

1.3 million 4.0Compact

1.9 million 31.0Mid-sized

947,000 29.0 Luxury

209,000 35.0SUV

357,000 50.0Small multipurpose vehicle 59,000 16.0Multipurpose vehicle 173,000 22.0Source: Automotive ResourcesAsia

Data in this publication wereprovided by AutomotiveResources Asia Ltd. 1106 Q House BuildingSukhumvit Soi 21 AsokeBangkok, Thailand 10110.www.auto-resources-asia.com.

Note: Sales data reflectvehicles produced in Chinaunless noted.

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B R A N D S A L E S


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CHINA PASSENGER VEHICLE BRAND SALES

The Volkswagen group remained the top automaker in China in 2007, rankedby brand sales of passenger vehicles. General Motors held the second spot,but the Toyota group is gaining ground quickly.

Global brands: 2007 2006 % chng.

Volkswagen group 946,433 775,039 22.1Audi 92,200 77,192 19.4Skoda 31,802 – –Volkswagen 822,431 697,847 17.9

General Motors group 527,915 446,706 18.2Buick 331,780 300,700 10.3Cadillac 4,384 547 701.5Chevrolet 191,751 145,459 31.8

Toyota group 455,038 280,424 62.3Toyota 452,912 280,424 61.5Daihatsu 2,126 – –

Honda 422,341 323,469 30.6Hyundai group 343,210 411,154 –16.5Hyundai 243,881 296,154 –17.7Kia 99,329 115,000 –13.6

Nissan 281,520 211,337 33.2PSA Peugeot Citroen group 207,255 201,318 2.9Citroen 115,036 120,039 –4.2Peugeot 92,219 81,279 13.5

Ford Motor group 180,476 134,385 34.3Ford 174,085 131,061 32.8Volvo 6,391 3,324 92.3

Suzuki 161,066 159,547 1.0Mazda 89,838 47,211 90.3Mitsubishi 67,236 54,222 24.0BMW 32,249 23,735 35.9Ssangyong 14,472 6,648 117.7Fiat 13,484 30,668 –56.0Chrysler group 9,277 6,801 36.4Chrysler 8,959 2,188 309.5Jeep 318 4,613 –93.1

Daimler (Mercedes) 6,882 5,508 24.9

Domestic brands: 2007 2006 % chng.

Chery 369,459 302,478 22.1Zhejiang Geely group 219,513 205,123 7.0

Geely 184,176 176,320 4.5Maple 35,337 28,803 22.7

Xiali 182,271 199,323 –8.6Haima 130,988 80,218 63.3Jinbei group 129,666 73,059 77.5

Jinbei 15,349 10,062 52.5Zhonghua 114,317 62,997 81.5

BYD 94,683 60,116 57.5Great Wall 64,732 40,062 61.6Changan 55,515 17,974 208.9JAC 48,114 34,363 40.0Hafei 44,799 65,391 –31.5Lifan 30,101 7,365 308.7FAW Car Co. 27,953 9,402 197.3Changfeng 25,758 24,688 4.3Dongfeng 22,341 18,818 18.7Roewe 16,549 – –Jiangling 16,323 14,070 16.0Zhongxing 10,771 8,716 23.6Changhe 7,295 18,400 –60.4Soueast 6,254 14,356 –56.4Beiqi 5,566 2,822 97.2MG Mingjue 3,131 – –Foton 1,717 1,152 49.0

Note: Reflects sales of locally produced passenger vehicles (cars, SUVs and MPVs); does not includeminivehicles, pickups or commercial vehicles; does not include sales of import vehicles

Source: J.D. Power and Associates, Automotive Resources Asia

AN AUTONEWS 04-14-08 D 4 AUTONEWS 4/9/2008 3:19 PM Page 1

G L O B A L A U T O M A K E R S / J O I N T V E N T U R E S6

Luxury cars in China are hot, and BMW AGwants to take full advantage of the trend.

In the first half of 2008, BMW plans to raiseits capacity in China to 44,000 unitsannually.

Sales of luxury vehicles rose 35 percent inChina in 2007.

BMW, including Mini, sold 51,588 cars inthe Chinese mainland last year, up 42percent from 2006. Those figures includeimports, says the company.

But to catch the luxury leader — Audi —BMW has a long way to go. The top-sellingluxury car — the Audi A6, with sales of 72,638— outsold BMW and Mini combined last year.

Meanwhile, rival Mercedes-Benz will startproducing C-class sedans in China thisspring, providing competition for BMW’slocally made 3 series.

Another big luxury challenger is Toyota.Last year the Crown posted sales of 53,111,according to Automotive Resources Asia.

Sales of the locally produced 5 series and 3series by its joint venture, BMW BrillianceAutomotive Ltd., rose 35.9 percent to 32,249last year. The growth was driven by the new5-series long-wheelbase sedan designed forChina. The sedan accounted for sales of17,647 units, up 61 percent from 2006.

The locally made 3 series posted theweakest growth among luxury models — uponly 3.1 percent in 2007.

Imports grew impressively. China remainedthe second-largest market for the imported 7 series last year by selling 10,688 units, up 42percent from 2006. The Mini more thandoubled sales in the Chinese mainland.

BMW will introduce the 1 series to China,Alfred Rupp, president of BMW’s jointventure in China, said in a recent interview.He also mentioned BMW would continue tolook into the rapidly growing SUV market.

BMW says its long-term strategy is toproduce more cars locally in China. Last year,the automaker’s local purchasing volume rose80 percent to 3.6 billion yuan ($501 million).

Also, BMW estimates the number of itsjoint venture’s suppliers will reach 150 thissummer. Currently, engines and a fewelectronic components are still imported.

BMW added 20 outlets for sales and servicein 2006, and the number reached 90 by theend of 2007.

— Lan Lan

MINI

BMW AG Beijing Representative Office28/F, Tower B, Gateway PlazaChaoyang District, Beijing 100027, P.R. China(86) 10-8455-8000, www.bmw.com.cnTop executive: Christoph Stark, president & CEO

JV: BMW Brilliance Automotive Ltd.No. 14, Shanzuizi Road, Dadong District, Shenyang CityLiaoning Province 110044, P.R. China(86) 24-8455-6000, www.bmw-brilliance.cnTop executive: Alfred Rupp, president

2007 2006

Capacity 41,000 30,000Production 34,720 25,808Unit sales 32,249 23,735

Models produced:BMW 320i, BMW 325i, BMW 523i, BMW 525Li,BMW 530Li

Ownership:BMW AG 50%Brillance China Automotive Holdings 50%

Chrysler LLC Asia Operations1/23F Landmark Tower, No. 8 N. Dongsanhuan RoadChaoyang District, Beijing 100004, P.R. China(86) 10-6590-6668, www.chrysler.com.cnTop executive: Philip Murtaugh, CEO

G L O B A L A U T O M A K E R S / J O I N T V E N T U R E S


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Expanding Chrysler LLC’s tiny presence inChina will be a tough job for Phil Murtaugh,the head of Chrysler’s Asian operations.

In the future, China may be moreimportant to Chrysler as a production basefor small cars than as a market. Chryslertook steps to make that a reality in 2007.

Murtaugh in September was hired awayfrom a job supervising overseas operationsfor Shanghai Automotive Industry Corp.Well connected in China, he formerly washead of General Motors’ China operations.

In 2007, Chrysler produced only one carmodel in China, the 300C sedan. It sold7,743 units.

The Dodge brand was introduced in Chinain November 2007 with the launch of theCaravan van. The Chrysler Grand Voyagervan was launched in China a few monthsearlier. Both are being produced underlicense at Southeast Motor Co.

In 2007, Chrysler moved closer to

Daimler AG struggled in China in 2007.The luxury market was hot, but sales of

Daimler’s only domestically producedmodel, the Mercedes-Benz E class, weremodest.

Chinese consumers flocked to domesticallyproduced BMW and Audi sedans at the lowend of the segment and imported Lexusvehicles at the high end.

Stuck in the middle, Mercedes faced atough market for the E class, which sold6,882 units in 2007. By contrast, Audi A6sales reached 72,638 last year.

Sales of locally produced Mercedes C-classcars began in March, but that model willface the same problems.

The luxury segment in China iscompetitive. BMW produces its 3 and 5series locally — the 5 series is a stretchversion for China’s chauffeur-drivenpassengers. The Toyota Crown and a stretchversion of the Audi A6 sedan also areproduced locally.

Imports were Mercedes’ strong point in2007, but there, too, the competition wasstiff. Mercedes sold 11,500 imported

S-class sedans in China, including HongKong and Macao. It sold 3,000 importedSUVs.

The imported Mercedes S350 has a rear-seat entertainment system customized forChina’s chauffeur-driven passengers.

But the S class was eclipsed by Toyota’sLexus brand in 2007 and will continue to be

overshadowed in 2008. Lexus sellsthree sedans in China andlaunched the imported LX 570SUV in January.

The Lexus is the car of choice forrich Chinese businessmen, says anexecutive at a U.S. consulting firm.Lexus’ strong point: The buyingexperience, the consultant says.Lexus’ 39 dealerships know how tomake customers feel they arebuying luxury items.

In 2008, Daimler will be busytrying to separate itself fromChrysler LLC in China. The twoparted ways in 2007, but theyshare a manufacturing site, anoffice and a marketing staff in

China, so separation is complicated.On the marketing side, Mercedes must

figure out how to trump that Lexusexperience so S-class sales can growstrongly. And it must figure out how to makeits locally produced models more attractivethan a BMW or an Audi.

— Alysha Webb

CHRYSLER GRAND VOYAGER

JV: Beijing Benz-DaimlerChrysler Automotive Co.

No. 8 Boxing Road, Beijing Economic-Tech AreaBeijing 100176, P.R.China(86) 10-6782-4888, www.bbdc.com.cnTop executive: Guenter Butschek, president & CEO

DaimlerChrysler China Ltd.1/23F Landmark Tower, No. 8 N. Dongsanhuan RoadChaoyang District, Beijing 100004, P.R. China(86) 10-6590-6668, www.daimlerchrysler.com.cnTop executive: Ulrich Walker, DCNEA chairman & CEO

2007 2006


Models produced: Jeep 2500/2700; MitsubishiOutlander; Chrysler 300C; Mercedes-Benz E class

Ownership:Beijing Automotive Industry Holding Corp. 50.4%DaimlerChrysler AG (DCAG) 37.2%DaimlerChrysler (China) Limited (DCCL) 12.4%

completing an agreement with CheryAutomobile Co. to produce small cars forexport. The two sides signed a memorandumof understanding in July. A final agreementhad not yet been signed as of early March.

When the agreement is signed, reports saythe two will start by exporting a version ofan existing Chery model to markets in LatinAmerica. The car’s exterior will be restyled togive it a Chrysler look, industry sources say.

Exports to Latin America are expected tobegin in 2008. Exports to the United States

won’t begin until at least 2009.Chrysler stopped producing Jeep models

in China in 2007. The Jeep brand now relieson imports.

This is a crucial year for Chrysler in China.Murtaugh must create consumer interest inthe Chrysler brand and further introduce theDodge brand into China’s hypercompetitivemarket.

In early 2008, the automaker added theChrysler Sebring sedan to its domesticproduction lineup.

Chrysler also began importing the DodgeAvenger and Dodge Caliber sedans in early2008.

In 2008, Chrysler also must work out itsrelationship with its former owner, DaimlerAG, in China. The two share a paint shop atBeijing Benz-DaimlerChrysler Automotive Co.and numerous executives. As of early March,the separation was still being worked out.

— Alysha Webb

MERCEDES E CLASS



10

For Fiat Auto S.p.A., 2007 was a year ofrelationships. One ended and anotherblossomed.

It was also a year when Fiat’s sales in Chinacontinued to fall as the automaker failed tointroduce new models.

Fiat became a second wife to longtimepartner Nanjing Automobile Group Corp.when the Chinese automaker began tomanufacture its own car based on the MGRover sedan in late 2007. In December, Fiatannounced that it was ending its

relationship with Nanjing Auto.Meanwhile, Fiat’s relationship with Chery

Automobile Co. grew closer in 2007. In August Fiat and Chery completed an

agreement under which Chery will produce100,000 engines annually for Fiat to use inChina and worldwide.

A day later, Fiat said it would form a jointventure with Chery to produce 175,000 carsannually. The first two models slated forproduction are the Alfa Romeo 159 and FiatLinea sedans. The joint-venture agreement

had not been completed as of late February. Without a plant in China, Fiat announced

in late 2007 that it would begin importingthree models in 2008: the Bravo, Punto andLinea. Local production of all three willbegin in 2009, Fiat said.

This year is crucial for Fiat in China. CEOSergio Marchionne has said Fiat aims to sell300,000 cars in China by 2010. To reach thatgoal, Fiat must start by producing cars inChina again.

— Alysha Webb

Ford Motor Co. is struggling in NorthAmerica. But not in China.

The automaker’s Changan Ford MazdaAutomobile Co. joint venture sold 217,100cars in China last year, up an eye-popping67.3 percent from 2006.

Ford made a relatively late entry intoChina in 2003. Its first China-builtpassenger vehicle, the Fiesta, sold poorly.

Ford now is growing nicely. That’s largelybecause of the Ford Focus, which accountsfor 57.6 percent of the joint venture’s sales. Atotal of 124,991 Focus cars were sold inChina in 2007.

Ford and its joint venture partners operatethree vehicle assembly plants and oneengine manufacturing plant in China. Fordoperations also include an automotivefinancing company and a Nanjing-basedparts sourcing and r&d center.

The Focus hatchback “is more attractivethan the traditional three-box sedan foryoung, single and female buyers in thecities,” says Mei Songlin, China generalmanager at J.D. Power Asia Pacific Inc.

FORD FOCUS

JV: Nanjing Fiat Auto Co.No. 66, Taixi Road, Jiangning High-Tech ParkNanjing City, Jiangsu Province 211100, P.R. China(86) 25-5210-0000, www.fiat.com.cnTop executive: Xu Jiufeng, CEO

Fiat (China) Business Co.Unit 2011, Beijing Silver Tower, No. 2 Dongsanhuan North RoadBeijing 100027, P.R. China(86) 10-6410-0666, www.fiatgroup.comTop executive: Franco Amadei, chairman

2007 2006Capacity 100,000 100,000Production 17,164 30,974Unit sales 13,484 30,668

Models produced:Fiat Palio, Palio Weekend, Siena, Perla

Ownership:Fiat Auto S.p.A. 50%Nanjing Automobile Group Corp. 50%

JV: Changan Ford Mazda Automobile Co.No. 1 Changfu West Road, Yuan Yang TownNew Northern Zone, Chongqing 401122, P.R. China(86) 23-6745-8888, www.ford.com.cnTop executive: Shen Yingquan, president & CEO

Ford Motor China33F, Shanghai Information Tower, 211 Century Ave.Pudong District, Shanghai 200120, P.R. China(86) 21-2891-6688, www.ford.com.cnTop executive: Robert Graziano, CEO

2007 2006

Capacity 410,000 200,000Production 205,680 137,782Unit sales 217,100 129,790Models produced: Ford Focus,Mondeo, S-Max; Mazda3; Volvo S40

Ownership:Ford Motor Co. 50%Changan Automotive Co. 35%Mazda Motor Co. 15%

JV: Jiangling Motors Corp.No. 509 Ying Bin Ave. North, Nanchang CityJiangxi Province 330001, P.R. China(86) 791-5266-000, www.jmc.com.cnTop executive: York Chen, president & CEO

2007 2006

Capacity 100,000 100,000Production 26,480 22,949Unit sales 26,585 22,937Models produced: Ford Transit

Ownership:Jiangling Holding Co. 41%Ford Motor Co. 30%Other 29%

Another hatchback, the Mazda2, startedselling in China in December. The car is madeat the Changan Ford Mazda plant in Nanjing.

Changan Ford Mazda is a joint venture ofFord Motor Co., Mazda Motor Corp. andChangan Automotive Corp.

At the Beijing auto show in April, Ford isexpected to display the new Fiesta sedanand hatchback. The hatchback will beginsales in China in the second half of 2008,with sedan sales starting in early 2009. Thecar will be built at the Nanjing plant.

Ford’s strategy calls for introducing cars ata steady rate. It does not want to flood the

market with many new cars at once, saysYale Zhang, director of emerging-marketsvehicle forecasts at CSM Worldwide.

Says Zhang: “I have confidence in Ford’sstrategy in China.”

Ford’s luxury sales also are growing. Sales of the locally made Volvo S40 jumped

92.3 percent in 2007 to 6,391 units. The car,which starts at $42,485, won 3 percent shareof the domestically produced luxury market.

Sales of imported Volvo, Jaguar and LandRover cars zoomed up 84 percent to 20,103units in 2007.

Changan Ford Mazda’s assembly plant inChongqing produces the Ford Focus, FordMondeo, Ford S-Max, Volvo S40 and Mazda3,with an annual capacity of 250,000 vehicles.

The company’s new plant in Nanjing,which opened in September 2007, boostedcapacity to 410,000 vehicles a year.

In January, Ford launched a new-generation Transit van with its commercial-vehicle joint venture partner, JianglingMotors Corp.

— Namrita Chow



12

In 2007, General Motors expanded China’srole in global r&d with a new provingground and an engineering center. GM’ssales in China remained strong.

During an October visit to China by CEORick Wagoner, GM said it would build awholly owned r&d center here. The center ispart of a $250 million corporate campus. Itsresearch will focus on alternative fuels andadvanced propulsion systems.

The r&d center also will help certify localsuppliers, speeding up sourcing ofcomponents from China for GM’sworldwide operations.

Also in October, GM announced a $225million proving ground in the central Chinaprovince of Anhui. The proving ground is ajoint investment with manufacturingpartner Shanghai Automotive Industry Corp.

At the same time, GM announced it willbuild a proving ground in Korea at itsDaewoo subsidiary.

Now, GM r&d chief Jim Queen can askeither Korea or China to support worldwider&d activities and product development,said Nick Reilly, president of GM AsiaPacific.

In November, GM established a jointventure with Shanghai Automotive toprovide OnStar telematics service to China.OnStar provides navigation assistance,accident notification, roadside assistanceand vehicle diagnostics.

On the sales side, GM’s growth slowed in2007. Sales rose only 18.2 percent compared

OPEL ASTRA TWIN TOP

General Motors China Investment Co.Jingmao Tower 10/F, No. 88 Shiji Road, Pudong DistrictShanghai 200121, P.R. China(86) 21-2898-7000, www.gmchina.comTop executive: Kevin Wale, chairman & CEO

JV: Shanghai GM (Shenyang) Norsom Motors Co.No. 15 North of Daying Road, Dadong District, Shenyang CityLiaoning Province 110044, P.R. China(86) 24-8834-5678, www.buick.com.cnTop executive: Xu Linhua, president

2007 2006

Capacity 50,000 50,000Production 40,627 40,031Unit sales 40,031 38,030Models produced: Buick GL8

Ownership:Shanghai General Motors 50%Shanghai Automotive Co. 25%General Motors China 25%

JV: SAIC-GM-Wuling Automobile Co.No. 18 Hexi Road, Liuzhou CityGuangxi Province 545007, P.R. China(86) 772-3750-258, www.sgmw.com.cnTop executive: Shen Yang, president

2007 2006

Capacity 400,000 400,000Production 29,871 42,416Unit sales 32,510 40,015Models produced:Chevrolet Spark

Ownership:Shanghai Automotive Co. 50%General Motors China 34%Wuling Automotive 16%

JV: Shanghai General Motors Corp.No. 1500 Shenjiang Road, Jin Qiao, Pudong DIstrictShanghai 201206, P.R.China(86) 21-2890-2890, www.shanghaigm.comTop executive: Ding Lei, president

2007 2006

Capacity 380,000 320,000Production 288,638 268,022Unit sales 268,000 268,642Models produced:Buick LaCrosse, Park Avenue, Regal,

Excelle, Excelle HRV; Cadillac SLS,RoyaumOwnership:SAIC Motor Corp. 50%General Motors 50%

JV: Shanghai GM Dongyue Motors Co.No. 118 Changjiang Road, Development Zone, Yantai CityShandong Province 264006, P.R. China(86) 535-6966-666, www.chevrolet.com.cnTop executive: Huang Keji, president

2007 2006

Capacity 150,000 120,000Production 138,326 106,686Unit sales 159,241 105,444Models produced:Chevrolet Sail, Sail SRV, Epica,Aveo, Lova

Ownership:Shanghai General Motors 50%Shanghai Automotive Co. 25%General Motors China 25%

with 2006, according to AutomotiveResources Asia. In 2006, sales rose 28.5percent. GM sold 527,915 cars in China in2007.

Kevin Wale, president of GM China,

attributed theslower growth to alack of newmodels. “We’regoing throughthat period wherewe are refreshingthe product line,”he said.

GM introducedonly two newdomesticallyproduced modelsin China in 2007,the Buick ParkAvenue sedan andthe Chevrolet

Epica. GM also began importing the OpelAstra Twin Top convertible and the OpelAstra GTC.

In 2008, GM is bringing environmentallyfriendly technology to China. In January itlaunched the LaCrosse hybrid sedan,produced at its joint venture with ShanghaiAutomotive. GM will launch three newengines, all offering better fuel economythan its current lineup, the company says.GM also will introduce another hybridmodel.

Hybrids aren’t likely to boost GM’s sales inChina much, although they will win kudosfrom the Chinese government.

In 2008, look for GM to introduce in Chinanew vehicles based on its global platforms.

— Alysha Webb

BUICK EXCELLE



13

Honda Motor Co. enjoyed an excellent2007 in China. Sales rose 30.6 percent lastyear to 422,341 units.

But a resurgent Toyota Motor Corp. couldslow Honda’s growth in 2008.

Propelling Honda’s growth was its jointventure Dongfeng Honda Automobile Co.Dongfeng Honda’s sales doubled from 2006to 127,086 units last year, encompassing81,339 Civic cars and 45,703 CR-V crossovers.The company started China production ofthe CR-V in 2004 and the Civic in 2006.

It was different for another Honda joint

venture, Guangzhou Honda Automobile Co.Sales of the company’s best-selling model,the Accord sedan, were slowed bycompetition from the Toyota Camry.

Guangzhou Honda sold 118,024 Accords in2007, down 4.2 percent. The Accord was thebest-selling car in its segment before Toyotalaunched the Camry in mid-2006. In the pastdecade, the Accord accounted for more thanhalf of Honda’s sales and profits in China.

Fighting back, this year Honda introduceda redesigned Accord. But sales have beenabout 7,500 units per month, well behindthe Camry’s 12,500 units or so per month.

Guangzhou Honda’s Fit subcompact willface competition from the Toyota Yaris.

— Kevin Huang

Honda Motor China Investment Co.Suite 301, Beijing Fortune Building, No. 5 N. Dongsanhuan Road, Chaoyand District, Beijing 100004, P.R. China(86) 10-6590-9011, www.honda.com.cnTop executive: Hyogo Atsuyoshi, president

JV: Guangzhou Honda Automobile Co.No. 1 Guangben Road, Huangpu District, Guangzhou CityGuangdong Province 510700, P.R. China(86) 20-8227-7789, www.guangzhouhonda.com.cnTop executive: Okawara Eiji, president

2007 2006

Capacity 360,000 360,000Production 295,254 261,943Unit sales 295,299 260,096Models produced: Honda Accord, Fit,City, Odyssey

Ownership:Guangzhou Automobile Industry

Group Co. 50%Honda Motor Co. 40%Honda Motor Investment Co. 10%

JV: Dongfeng Honda Automobile (Wuhan) Co.No. 283 Checheng Dongdao, Economic & Technical Development Zone Wuhan City, Hubei Province 430056, P.R. China(86) 27-8428-6000, www.dhac.com.cnTop executive: Mitsuru Ozaki, president

2007 2006

Capacity 120,000 120,000Production 124,976 66,004Unit sales 127,086 63,373Models produced: Honda Civic, CR-V,Civic Hybrid

Ownership:Dongfeng Motor Corp. 50%Honda Motor Co. 40%Honda Motor Investment Co. 10%

JV: Honda Automobile (China) Co.No. 363 Kai Chuang Avenue, East Section, Guangzhou Economic &Technological District, Guangzhou City, Guangdong Province 510760, P.R. China(86) 20-3228-8000Top executive: Masaya Nagai, president

2007 2006

Capacity 50,000 50,000Production 43,584 24,604Unit sales 43,124 24,600Models produced: Honda Jazz (for export)

Ownership:Honda Motor Co. 55%Guangzhou Automobile

Industry Group Co. 25%Honda Motor Investment Co. 10%Dongfeng Motor Group Co. 10%

Hyundai Motor Group China Ltd.Room 701, Hyundai Motor Tower, No. 38 Xiaoyun Road, Chaoyang District, Beijing 100027, P.R. China(86) 10-8453-9666, www.hmgc.com.cnTop executive: Lee Il Jang, president

2007 2006

Capacity 300,000 300,000Production 231,888 290,088Unit sales 231,137 290,011Models produced: Hyundai Elantra,NF, Sonata, Tucson, Verna

Ownership:Hyundai Motor Co. 50%Beijing Automotive

Industry Holding Corp. 50%

2007 2006

Capacity 150,000 130,000Production 105,028 114,523Unit sales 101,427 115,000Models produced: Kia Sportage, Accent,Carnival, Optima, Cerato, Rio

Ownership:Kia Motors 50%Dongfeng Motor Industry

Investment Co. 25%Jiangsu Yueda Co. 25%

JV: Beijing Hyundai Motor Co.No. 18 Shuntong Road, Linhe Industry Development Area, Shunyi DistrictBeijing 101300, P.R. China(86) 10-8949-0088, www.beijing-hyundai.com.cnTop executive: J.M. Noh, president

JV: Dongfeng Yueda Kia Automobile Co.No. 18 Kaifang Road, Yancheng City, Jiangsu Province 224002, P.R. China(86) 515-8226-262, www.dyk.com.cnTop executive: H.K. Lee, president

Hyundai and Kia would like to forget 2007.China’s auto market grew 21.3 percent, butsales at Hyundai Motor Group China Ltd.dropped 16.5 percent.

For instance, sales at the group’s BeijingHyundai Motor Co. fell 20.3 percent from2006 to 231,137 units, well below the targetof 310,000 units. Hyundai and Kia areaddressing the situation in China by keepinghigh sales goals and adding capacity.

Beijing Hyundai will open a second plantin April, doubling capacity to 600,000 units.The sales target for the year is about a 64percent increase, to 380,000 units.

New models planned for China in 2008 arethe Elantra in April, the Genesis sport luxurysedan in June, the Genesis coupe in Octoberand the Sonata FL in November. The Genesismodels will be produced in Korea.

Hyundai says new models will be tailored

to better suit the tastes of Chineseconsumers — largely meaning more chromehighlights on the Sonata and other staplemodels.

For 2008, Kia plans to begin exporting itsnew Borrego large SUV from Korea to Chinain June. Dongfeng Yueda Kia Automobile Co.began production at its second factory inOctober.

— Gary Anglebrandt

HONDA ACCORD



14

Mitsubishi Motors Corp. is proof that inChina sales don’t always go up.

The company is in a rebuilding phase inChina and expects sales of Mitsubishi-related vehicles, including those built bylicensees, to fall to 77,000 units in 2010. Thatis a 21.2 percent drop from 97,765 in 2007,according to company figures.

Sales last year were flat from 2006, andMitsubishi hasn’t given an outlook for 2008.To stop the decline, it aims to strengthen itslocal sales networks. Part of the plan isincreasing sales of imported Mitsubishi cars.

On that score, the company has postedmodest success, having boosted importsales to 9,970 units last year from 4,000

vehicles a year earlier.Mitsubishi’s China business could get a big

lift from launching the redesigned Lancer,which has already debuted in the UnitedStates, Europe and Japan. But Mitsubishi isstill deciding whether the sporty sedan willmake it to China in 2008.

— Hans Greimel

Nissan Motor Co. is counting on newmodels to fuel growth in 2008. The companyexpects sales to expand 27.9 percent to360,000 vehicles this year.

The company is getting a boost from newmodels such as the Infiniti M35, which waslaunched in January. The popular Qashqaicrossover debuted in March.

Nissan and Infiniti each will launch twomore models in 2008, but Nissan won’t saywhich.

A top challenge will be nurturing theInfiniti brand, introduced in China only lastJuly. Luxury cars make up just 2.0 percent ofthe local market, and Infiniti sales totaled ameager 1,500 units last year.

By contrast, the Nissan Tiida is enjoyingstrong momentum. Its sales rose 11.5percent to 123,310 last year despite beingin the subcompact segment, where 25 of 42

models declined in sales.In December, the Tiida was the fourth-

best-selling model in China.In other segments, Nissan is starting to feel

pressure from increased competition. Sales of the compact Sylphy nearly

quadrupled to 57,182 units last year. ButNissan had to drop the price 9.0 percent tocounter price cuts on the Mazda6 and

Volkswagen Bora. Nissan also will be challenged to ensure

high-quality customer service amid the rapidgrowth. The automaker sees sales outletsgrowing to 340 this year from 300 in 2007.

Nissan is hoping to boost sales through anew financing arm that it opened in Januarywith its local partner, Dongfeng MotorGroup Co. The venture will give new-carloans to Nissan and Infiniti customers acrossChina as well as provide inventory financingfor dealers.

To make sure dealer performance is up tosnuff, Nissan also opened a 6,397-square-meter (69,000-square-foot) training center atthe Huadu plant last month.

That center can instruct 500 sales associatesand mechanics at one time. Nissan invested$3.1 million in the training center.

— Hans Greimel

Mitsubishi Motors Corp. F18 Eastern Wing, Hanwei Plaza, No. 7 Guanghua RoadChaoyang District, Beijing 100021, P.R. China(86) 10-6561-3030, www.mitsubishi-motors.com.cnTop executive: Hiromi Endo, general manager

JV: Hunan Changfeng Motor Co.18/F Hualing Building, 111# Second Section, Furong Mid RoadChangsha City, Hunan Province 410011, P.R. China(86) 731-2881-800, www.cfmotors.comTop executive: Li Jianxin, president

2007 2006

Capacity 80,000 80,000Production 24,546 23,574Unit sales 24,428 24,688Models produced: Liebao (MitsubishiPajero)

Ownership:Changfeng Group 50%Others 35%Mitsubishi Motors Corp. 15%

JV: Soueast (Fujian) Motor Co.Dongnan Industrial Area, Fuzhou CityFujian Province 350119, P.R. China(86) 591-2276-6566, www.soueast-motor.com Top executive: Jian Qinglong, general manager

2007 2006

Capacity 150,000 150,000Production 40,056 42,572Unit sales 45,679 45,360Models produced: Lioncel, Landio,Soveran, Freeca, Galant, New SpaceWagon

Ownership:Mitsubishi Motors Corp. 25%Fujian Motor Industry Group 50%Taiwan China Motor Corp. 25%

Nissan (China) Investment Co.13/F, South Tower of Beijing Kerry Centre, No. 1 Guang Hua RoadChaoyang District, Beijing 100020, P.R. China(86) 10-8529-8181, www.nissan.com.cnTop executive: Kayashima Yukihisa, CEO

JV: Dongfeng Motor Co./Dongfeng Nissan PassengerVehicle Co.

No. 8 Fengshen Road, Huadu, Guangzhou,Guangdong Province 510800, P.R. China(86) 20-8687-0670, www.dongfeng-nissan.comTop executive: Mamoru Yoshida, general manager

2007 2006

Capacity 360,000 360,000Production 273,898 201,251Unit sales 271,915 203,537Models produced: Nissan Bluebird,

Sunny, Teana, Tiida, Sylphy; Livina GenissOwnership:Nissan (China) Investment Co. 50%Dongfeng Motor Group Co. 50%

JV: Zhengzhou Nissan Automobile Co.No. 1405, East Hanghai Road, Zhengzhou Economic & Technical ZoneZhengzhou City, Henan Province 450016, P.R. China(86) 371-6603-3666, www.zznissan.com.cnTop executive: Guo Zhenfu, general manager

2007 2006

Capacity 60,000 60,000Production 10,258 7,795Unit sales 9,605 7,800Models produced: Nissan Paladin SUV

Ownership:Dongfeng Motor Co. 51%Nissan Motor Co. 30%Zhengzhou Light Vehicle Co. 19%

NISSAN QASHQAI



16

Suzuki Motor Corp.’s aging lineup ofinexpensive cars hobbled growth in 2007.

Suzuki brand sales grew just 1 percent lastyear to 161,066 domestically made cars,compared with the overall industry’s 21.3percent increase.

“Suzuki has been in China for a long timewith its low-end image,” says John Zeng,senior market analyst at the AsianAutomotive Research division of GlobalInsight Inc. “Therefore, they have difficultygaining market share in tier-one cities.”

But Suzuki is trying to change that.In 2007, the automaker introduced a

hatchback version of its Tianyu SX4 sedan.In April, Suzuki also introduced twoimported SUVs: the Jimmy and Grand Vitara.

A total of 21,379 Tianyu SX4 cars were soldin 2007. The hatchback model accounted for80 percent of SX4 sales, says Yang De Ping ofChongqing Changan Suzuki Automobile Co.The car’s sticker price starts at $13,233.

“Suzuki’s hatchback SX4 is selling well. This

car will really help Suzuki’s volume inChina,” says Yale Zhang, director ofemerging markets at the CSM Worldwideconsulting firm. With all the changes atSuzuki, Zhang is optimistic: “I don’t thinkthey are in bad shape in China.”

Sales of the Wagon R, a minivan made by

Jiangxi Changhe Suzuki Automobile Co., rose11.7 percent to 37,925 units last year. Sales ofSuzuki’s other cars — the Swift, New Swiftand Alto — dropped.

“Suzuki has only launched three new carmodels in recent years and made a bigmistake by using an old engine for its NewSwift,” Zeng says.

The automaker is expected to launch anupdated version of the Alto this year. Altosales were down 18.7 percent to 31,930 in2007.

Says Mei Songlin, China general managerfor J.D. Power and Associates: “To push uptheir sales in China, Suzuki has to launchproducts in the mid-sized segment.”

Suzuki primarily competes in small cars,which didn’t grow in 2007.

Says Zeng of Global Insight: “Poor brandimage” associated with the Alto “and slowproduct freshenings in China are the mainfactors that drag Suzuki’s sales down.”

— Namrita Chow

SUZUKI TIANYU SX4

JV: Chongqing Changan Suzuki Automobile Co.Yu Dong Town, Ba Nan District, Chongqing 401321, P.R. China(86) 23-6628-8623, www.changansuzuki.comTop executive: Tosiaki Hasimoto, general manager

2007 2006

Capacity 200,000 200,000Production 107,624 112,565Unit sales 108,239 112,097Models produced: Suzuki Alto, Swift,New Swift, Tianyu SX4

Ownership:Changan Automobile Co. 51%Suzuki Motor Corp. 25%Sojitz Corp. 14%Suzuki Motor Investment Co. 10%

JV: Jiangxi Changhe Suzuki Automobile Co.No. 1 East Road, Jindezhen City, Jiangxi Province 333002, P.R. China(86) 798-8416-868, www.changhe-suzuki.comTop executive: Takeuchi Masahiro, general manager

2007 2006

Capacity 160,000 160,000Production 47,470 56,000Unit sales 47,393 45,689Models produced: Bei Dou Xing(Suzuki Wagon R+), Liana

Ownership:Changhe Group 51%Suzuki Motor Corp. 46%Okaya 3%

PSA Peugeot CitroenGroup Beijing Office, Unit 416, 4th Floor, Tower A Beijing Kelun Building12A Guanghualu, Chaoyang District, Beijing 100020, P.R. China(86) 10-6581-4158, www.psa.net.cnTop executive: Yves Boutin, chief representative

JV: Dongfeng Peugeot Citroen Automobile Co.No. 165 Shenlong Ave.Wuhan Economic-Technological Development AreaWuhan City, Hubei Province 430056, P.R. China(86) 27-8429-9882, www.dpca.com.cnTop executive: Liu Weidong, general manager

2007 2006

Capacity 220,000 150,000Production 213,058 201,858Unit sales 207,255 201,318Models produced: Citroen C2, Elysee, Fukang (ZX),

Picasso, Xsara, Kaixuan (C-Triomphe);Peugeot 206, 307Ownership:PSA Peugeot Citroen 50%Dongfeng Motor Industry

Investment Co. 50%

PSA/Peugeot-Citroen SA lagged the overallmarket last year.

Sales of PSA vehicles in 2007 rose only 2.9percent to 207,255 units, including importsand sales of its joint venture in Wuhan,Dongfeng Peugeot Citroen Automobile Co.The China light-vehicle market grew 21.3percent last year.

PSA was slow in rolling out new products. Itlaunched only two redesigned models inChina in 2007: the redesigned Citroen Picassoand the Peugeot 307 three-box sedan.

The company launched the Peugeot 307hatchback in February, about 1½ years afterFord launched the hot-selling Focushatchback.

To catch up with the swiftly changingmarket, this year PSA plans to launch fivePeugeot and Citroen brand models basedon its existing platforms in China. Thecompany expects the new products willboost sales 35.1 percent to 280,000 units in2008.

In 2009, the second assembly plant in

Wuhan will begin production, and the firstmodel will be the Citroen C5. With the newplant, PSA’s capacity in China will be 450,000units.

PSA continues its cost-cutting efforts. All itsmodels source more than 80 percent of theircomponents in China, says the company.

Last June, PSA and Hafei Motor Co. signeda memorandum of understanding to set up ajoint venture to assemble light commercialvehicles in Shenzhen.

— Lan Lan

Suzuki Motor Corp. Beijing OfficeRoom 502, Beijing Fortune Building, No. 5 Dongsanhuan Bei RoadChaoyang District, Beijing 100004, P.R. China(86) 10-6590-8040, www.suzuki.comTop executive: Kunihisa Matsubara, general manager



17

Toyota Motor Corp. was a late bloomer inChina. But it is closing fast on the marketleaders.

The company still trails Volkswagen AGand General Motors in overall sales. But lastyear it leapfrogged domestic rival HondaMotor Co. to be the top Japanese brand inthe country.

Toyota now is eyeing a 53.8 percent salesincrease to 700,000 units this year on its wayto 1.0 million in the early 2010s. Salesjumped 62.3 percent to 455,038 vehicles in2007.

As a sign of Toyota’s ascent, the Camry wasthe third-best-selling car in China last year.

Looking ahead, Toyota will have tonavigate the pitfalls of quick expansion as itsets up new sales outlets and boostsproduction to meet demand. Japanese pressreports are rife with speculation that thecompany will soon build an eighth assemblyplant in China.

Toyota also will have to deepen the roots of

its Lexus luxury lineup. By the end of January, Toyota had 469 sales

outlets in China, up from 366 in November2006. Lexus sales points, however, rose to 39,from just 13.

Plant 2 of Sichuan FAW Toyota Motor Co.,which makes Land Cruiser SUVs and Prius

hybrid vehicles, struggled. In 2006, the joint venture sold just 4,858

vehicles. Sales dropped to 2,925 units lastyear, reflecting Chinese disenchantmentwith the pricey Prius.

Prius sales tumbled 80.7 percent to a paltry414 vehicles in 2007. And the model couldget squeezed even further as Chinesemanufacturers roll out cheaper hybrids oftheir own.

Still, Toyota’s overall sales are expected toget a big boost from an influx of freshproduct.

Lexus launched its top-of-the-line LX 570SUV in January, just as SUV sales began topick up in China. A redesigned subcompactVios appeared in February. Meanwhile,Toyota will get positive spillover fromDecember’s launch of a refreshed LandCruiser.

Finally, a next-generation Yaris is expectedaround midyear.

— Hans Greimel

TOYOTA CAMRY

Toyota Motor China Investment Co.Room 3806-11, Jin Guang Center, Hujialou, Chaoyang District, Beijing 100020, P.R. China(86) 10-6597-3995, www.toyota.com.cnTop executive: Isogai Masashi, general manager

2007 2006


Models produced:Toyota Corolla, ViosOwnership:Toyota Motor Corp. 40%FAW Xiali Automobile Co. 30%First Auto Works 20%Toyota Motor Investment Co. 10%

JV: Tianjin FAW Toyota Motor Co. — Plant 1No. 2, Liuli Road, Yang Liu Qing, Xiqing District, Tianjin 300380, P.R. China(86) 22-2794-4050, www.tftm.com.cnTop executive: Masahiro Kato, general manager

Tianjin FAW Toyota Motor Co. — Plant 2No. 81 9th Ave., Tianjin Tai Da Economic-Technological Development AreaTianjin 300457, P.R. China(86) 22-6623-0666, www.tftm.com.cnTop executive: Masahiro Kato, general manager

2007 2006


Models produced: Toyota Crown, ReizOwnership:Toyota Motor Corp. 40%FAW Xiali Automobile Co. 30%First Auto Works 20%Toyota Motor Investment Co. 10%

2007 2006


Models produced: Toyota Land Cruiser, PradoOwnership:FAW Group 50%Toyota Motor Corp. 45%Toyota Tsusho Corp. 5%

JV: Sichuan FAW Toyota Motor Co. — Plant 1No. 9 Tiaodenhe South Road, Chenghua District, Chengdu City,Sichuan Province 610051, P.R. China(86) 28-8471-7126, www.sftm.com.cnTop executive: Hoshino Haruaki, general manager

2007 2006


Models produced: Toyota Land Cruiser, PriusOwnership:FAW Group 50%Toyota Motor Corp. 45%Toyota Tsusho Corp. 5%

Sichuan FAW Toyota Motor Co. — Plant 2No. 5 Dongfeng St., Changchun City, Jilin Province 130011, P.R. China(86) 431-5786-808, www.sftm.com.cnTop executive: Hoshino Haruaki, general manager

JV: Guangzhou Toyota Motor Co.No. 8 Huangge Duan Huangge Zhen, Shi Nan RoadNansha Economic Development District, Guangzhou CityGuangdong Province 511400, P.R. China(86) 20-3939-8888Top executive: Kuzuhara Toru, general manager

2007 2006

Capacity 200,000 200,000Production 170,277 61,281Unit sales 170,294 61,254Models produced:Toyota Camry

Ownership:Guangzhou Automobile

Industry Group Co. 50%Toyota Motor Corp. 50%

Tianjin FAW Toyota Motor Co. — Plant 3No. 81 9th Ave., Tianjin Tai Da Economic-Technological Development AreaTianjin 300457, P.R. China(86) 22-6623-0666, www.tftm.com.cnTop executive: Masahiro Kato, general manager

2007 2006

Capacity 180,000 –Production 64,462 –Unit sales 63,999 –

Models produced: Toyota Corolla, ExOwnership:Toyota Motor Corp. 40%FAW Xiali Automobile Co. 30%First Auto Works 20%Toyota Motor Investment Co. 10%



18

Despite tough competition from GeneralMotors, Toyota and surging Chinese brands,Volkswagen AG extended its lead in China’scar market in 2007.

Rolling out fresh models with newtechnology and improving its image withChinese consumers helped VW boost itsshare to 17.5 percent at the end of 2007, up1.6 percentage points from 2006, accordingto Automotive Resources Asia.

Last summer, Volkswagen China

Investment Co. began offering new models.In June, it introduced the Skoda brand toChina with the launch of the Octavia.

VW wants Skoda to be its volume brand inChina, and Skoda models will start at lowerprices than Volkswagen or Audi cars. TheOctavia started well, selling nearly 32,000units in six months.

VW has beefed up its r&d capability inChina. For example, in 2007 it announcedthat Shanghai Volkswagen Automotive Co.

would design the interior and exterior of acar aimed at North America and China.

VW began to see results in 2007 from a2005 restructuring aimed at, among otherthings, cost reduction through centralizedpurchasing and increased localization.

VW also improved customer service inChina last year. Shanghai Volkswagen andFAW-VW boosted their scores on the J.D.Power customer satisfaction survey.

— Alysha Webb

Volkswagen China Investment Co.3A Sanlitun Road, Chaoyang District, Beijing 100027, P.R. China(86) 10-6505-3232, www.volkswagen.com.cnTop executive: Winfried Vahland, president and CEO

JV: FAW-Volkswagen Automotive Co.Dongfeng Street, Changchun, Jilin Province 130011, P.R. China(86) 431-5990-151, www.faw-volkswagen.comTop executive: An Tiecheng, president

2007 2006

Capacity 660,000 450,000Production 490,000 346,787Unit sales 469,169 345,318Models produced: Audi A4, A6;VW Bora, Caddy, Golf, Magotan, Jetta,Sagitar

Ownership:China FAW Group Corp. 60%Volkswagen AG 20%Volkswagen Investment Co. 10%Audi AG 10%

JV: Shanghai Volkswagen Automotive Co.No. 63, Luo Pu Road, An Ting, Jiading Distict, Shanghai 201805, P.R. China(86) 21-5956-1888, www.csvw.comTop executive: Chen Zhixin, general manager

2007 2006

Capacity 450,000 450,000Production 466,139 350,630Unit sales 456,424 349,088Models produced: VW Passat, Touran,Passat Lingyu, Polo, Santana, Santana 3000, Skoda Octavia

Ownership:Shanghai Automotive Industry Corp. 50%Volkswagen AG 40%Volkswagen Investment Co. 10%

P R O D U C T I O N F A C I L I T I E S I N C H I N A


19

1 - BMW Brilliance Automotive Ltd. Shenyang, Liaoning Province

2 - Beijing Benz-DaimlerChrysler Automotive Co.Beijing

3 - Nanjing Fiat Auto Co. Nanjing, Jiangsu Province

4 - Changan Ford Mazda Automobile Co.Chongqing

5 - Jiangling Motors Corp.Nanchang, Jiangxi Province

6 - Shanghai GM (Shenyang) Norsom Motors Co.Shenyang, Liaoning Province

7 - SAIC-GM-Wuling Automobile Co.Liuzhou, Guangxi Province

8 - Shanghai General Motors Corp.Shanghai

9 - Shanghai GM Dongyue Motors Co.Yantai, Shandong Province

10 - Guangzhou Honda Automobile Co. Guangzhou, Guangdong Province

11 - Dongfeng Honda Automobile (Wuhan) Co.Wuhan, Hubei Province

12 - Honda Automobile (China) Co.Guangzhou, Guangdong Province

13 - Beijing Hyundai Motor Co.Beijing

14 - Dongfeng Yueda Kia Automobile Co. Yangcheng, Jiangsu Province

15 - Hunan Changfeng Motor Co.Changsha, Hunan Province

16 - Zhengzhou Nissan Automobile Co.Zhengzhou, Henan Province

17 - Dongfeng Peugeot Citroen Automobile Co.Wuhan, Hubei Province

18 - Chongqing Changan Suzuki Automobile Co.Chongqing

19 - Jiangxi Changhe Suzuki Automobile Co. Jindezhen, Jiangxi Province

20 - Tianjin FAW Toyota Motor Co.Tianjin

21 - Sichuan FAW Toyota Motor Co.Chengdu, Sichuan Province

22 - Sichuan FAW Toyota Motor Co. Changchun, Jilin Province

23 - FAW-Volkswagen Automotive Co. Changchun, Jilin Province

24 - Shanghai Volkswagen Automotive Co.Shanghai

25 - Dongfeng Nissan Passenger Vehicle Co.Guangzhou, Guangdong Province

26 - Guangzhou Toyota Motor Co.Guangzhou, Guangdong Province

27 - Soueast (Fujian) Motor Co.Fuzhou, Fujian Province

1 - Dongfeng Liuzhou Motor Co. Liuzhou, Guangxi Province

2 - Dongfeng Automobile Co. Xiangfan, Hubei Province

3 - FAW Car Co. Changchun, Jilin Province

4 - FAW Haima Automobile Co. Haikou, Hainan Province

5 - Tianjin FAW Xiali Automobile Co.Tianjin

6 - Chery Automobile Co. Wuhu, Anhui Province

7 - Anhui Jianghuai Automobile Co. Hefei, Anhui Province

8 - Shenyang Brilliance Jinbei Automotive Co. Shenyang, Liaoning Province

9 - BYD Auto Co. Xian, Shaanxi Province

10 - Jiangxi Changhe Automobile Co. Jing De Zhen, Jiangxi Province

11 - Zhejiang Geely Automobile GroupHangzhou, Zhejiang Province

12 - Great Wall Motor Co. Baoding, Hebei Province

13 - Hafei Motor Co. Harbin, Heilongjiang Province

14 - Hebei Zhongxing Automobile Co. Baoding, Hebei Province

15 - Rongcheng Huatai Automobile Co. Rongcheng, Shandong Province

16 - Jiangxi Jiangling Holding Co.Nanchang, Jiangxi Province

17 - Beijing Automobile Works Co.Beijing

18 - Chongqing Changan Automobile Co.Chongqing

19 - Chongqing Lifan Automobile Co.Chongqing

20 - Hunan Jiang Nan Automobile Co.Xiangtan, Hunan Province

21 - SAIC Motor Manufacturing Co.Shanghai

Global automakers/Joint ventures Domestic automakers

C H I N A

MONGOLIAAN

NEPAL

MYANMARLAOS

PHILIPPINES

JAPAN

VIETNAM

Guangdong

Tianjin

Sichuan

Shaanxi

ShandongShanxi

Shanghai

Beijing

Ningxia

Inner Mongolia Liaoning

Guizhou

Guangxi

Gansu

X i z a n g

X i n j i a n g

Hubei

Hunan

Hebei

Henan

Heilongjiang

Fujian

Qinghai

Jilin

Jiangsu

Jiangxi

Zhejiang

Anhui

Hong Kong

Taiwan

Hainan

Yunnan

Chongqing

4

1

2

3

4

5

6

7

8

9

10

12

11

13

14

15

16

17

19

20

21

2223

24

2526

1

2

3

5

7

6

8

9

10

13

14 1215

16

17

18 20

21

27

11

1918

AN AUTONEWS 04-14-08 D 19 AUTONEWS 4/9/2008 3:31 PM Page 1

Despite competition from internationalbrands, domestic carmakers sold the mostpassenger vehicles in China in 2007.

Thanks to a wave of new models from suchautomakers as Chery Automobile Co. andBYD Auto Co., domestic brands grabbed 28.7percent of the market last year. Japanesebrands were second with 28.3 percent,according to Automotive Resources Asia, aunit of J.D. Power and Associates.

Chery was the No. 1 domestic automaker.It sold 369,459 units in 2007, up 22.1 percentfrom 2006. It was followed by Zhejiang GeelyAutomobile Group, at 219,513 units, andFAW Xiali, at 180,280.

With global automakers dominating themid-sized and large segments, domesticauto manufacturers concentrated on smalland inexpensive models. Their cars typicallywere priced between $4,500 and $14,000.

Prodded by China’s government, largedomestic automakers are launching their ownbrands. For instance, Dongfeng Motor Co.launched its first car, a small wagon, inOctober, while Guangzhou Automobile GroupCo. displayed three concept cars in November.

The industry also is attracting new players.Ningbo Bird Co., a mobile phone handsetmanufacturer, finally secured a license from

the Chinese government to make cars at theend of 2007.

With China’s automotive sector becomingincreasingly crowded, the long-anticipatedconsolidation finally got under way.

In December 2007, Shanghai AutomotiveIndustry Corp. acquired Nanjing Automobile(Group) Corp. after the latter came undertremendous financial pressure following itspurchase of the MG brand and Rover’sLongbridge plant in England.

Both SAIC and Nanjing Auto are state-owned enterprises. The Chinese governmentwas seen playing an active role in brokeringthe deal. Industry observers believe the

government will continue to force ailingstate-owned automakers into the arms ofhealthy ones.

Domestic automakers continue to sourcelow-priced auto parts from Chinesesuppliers to reduce their costs. Internationalauto giants, such as General Motors andVolkswagen AG, are following the samestrategy. Increasingly they are localizingadvanced components parts, such as sometransmission parts, in China.

To avoid the intense competition in thedomestic market, Chinese automakersstepped up efforts to export to the MiddleEast, North Africa, the former Soviet blocand Southeast Asia. Chery, the largestexporter among domestic automanufacturers, exported more than 118,000vehicles in 2007.

While the domestic automakers areprogressing, many are still years away frommaking high-quality cars that can competeeffectively in Europe and the United States.

But Shenyang Brilliance Jinbei AutomotiveCo. is trying to build sales this year in Europeafter it reworked its BS6 sedan, which failedcrash tests last year. Chery is proceeding withplans to build a U.S. car for Chrysler LLC.

— Yang Jian

CHINESE BRANDS GRAB SHARE

D O M E S T I C A U T O M A K E R S


20

Domestic brands claim largest share of market

Domestic brands sold the largest number ofpassenger vehicles in China in 2007, followed byJapanese brands.BRANDS 2007 SHARE 2006 SHARE

Domestic 28.7% 27.7%Japanese 28.3% 24.9%European 22.6% 24.1%U.S. 13.6% 13.5%Korean 6.8% 9.7%Source: Automotive Resources Asia Ltd.

Beijing Automotive Industry HoldingCorp.’s 2007 performance was disappointing.

Now, Chairman Xu Heyi is stepping upefforts to revive the state-owned automaker’spassenger-vehicle business.

Neither of BAIC’s two joint ventures, withHyundai Motor Co. and DaimlerChrysler AG,did well in 2007.

Beijing Hyundai Motor Co.’s sales slumped20.3 percent to 231,137 units in 2007. Salesof the once hot-selling Hyundai Elantradropped 29.1 percent to 120,333 units, whileHyundai Sonata sales declined 31.2 percentto 25,528 units.

Sales of Beijing Benz-DaimlerChryslerAutomotive Co. dropped from the previousyear to 19,730 units in 2007. For contrast,Daimler’s rival BMW boosted sales of itsjoint venture with Brilliance ChinaAutomotive Holding Ltd. to 32,249 units lastyear.

A bright spot for Xu in BAIC’s operations iscommercial vehicles. Selling more than400,000 vehicles, Beiqi Foton was China’slargest commercial-vehicle maker in 2007.

To reinvigorate its passenger-vehiclebusiness, BAIC in late 2007 set up a holdingcompany, Beijing Hainachuan AutomotiveParts Co., for its 12 in-house suppliers,including its joint ventures with DelphiCorp., Johnson Controls Inc., Visteon Corp.and BorgWarner Inc.

BAIC hopes that the holding company canboost the variety and quality of partssupplied to its joint ventures and its own-brand vehicles.

Beijing Hyundai sources a large portion ofits components from Korea. Beijing Benz-DaimlerChrysler also relies heavily onimported parts. Localizing parts will reducecosts.

BAIC unveiled its own brand last year. It

is expected to unveil more models at the2008 Beijing auto show. Industry sourcessay the vehicles are mainly derived fromprevious generations of the HyundaiSonata.

After coming on board in late 2006 asBAIC’s chairman, Xu, a former Beijingmunicipal government official, has mappedout ambitious plans to rebuild BAIC.

In February this year, BAIC hired WangDazong away from Shanghai AutomotiveIndustry Corp. to be its general manager.Wang was trained in the United States andwill be put in charge of developing BAIC’sown brand.

BAIC aims to sell 1 million vehicles in 2008and 2 million in 2010, including cars, SUVsand commercial vehicles. These arechallenging targets for an automaker thatsold fewer than 700,000 vehicles in 2007.

— Lan Lan

Beijing Automotive Industry Holding Corp.No. 25, Dong San Huan South Road, Chaoyang DistrictBeijing 100021, P.R. China(86) 10-6769-9888Top executive: Xu Heyi, chairman

Global JVsBeijing Benz-DaimlerChrysler Automotive Co. – Beijing – Mitsubishi Outlander;Chrysler 300C; Mercedes-Benz E class (Page 8)Beijing Hyundai Motor Co. – Beijing – Hyundai Sonata, Elantra,Tucson, NF, Verna(Page 13)

2007 2006


Models produced: Luba, Suwei, Sujun,Zhanqi, Xuanfeng, LeichiOwnership:Bejing Automotive Industry Corp. 100%

Beijing Automobile Works Co.No. 51, Fangjiacun, Guangqu East Road, Chaoyang DistrictBeijing 100022, P.R. China(86) 10-8774-3332, www.baw.com.cnTop executive: Yao Changsheng, president



22

Shenyang Brilliance Jinbei Automotive Co.rolled out its first passenger vehicle in 2000.But eight years later the automaker has onlythree models.

The automaker’s major challenge for thenext few years is to boost r&d and addproducts.

Brilliance was established as a state-owned light-bus manufacturer in ShenyangCity in Liaoning Province in 1991. It startedto produce the Zhonghua sedan in 2000. Butthe company was distracted by frequentreshufflings of top executives from 2001 to2006 because of an ownership disputebetween the Liaoning provincialgovernment and the company’s founder,Yang Rong.

Brilliance now produces three models,the Zunchi (also called the BS6), theSplendor (also called the BS4) and theJunjie.

The company sold 32,006 Zunchis and82,311 Splendors in 2007, growing by 81.5percent compared with 2006.

Brilliance needs more new products to fuelgrowth, but the company has yet toannounce new models.

Despite its modest sales in China,Brilliance is trying to export to Europe.

Last year it suffered a setback when theBS6 received only one star, the worst rating,in the European New Car AssessmentProgram.

Brilliance has redesigned 65 parts of theBS6 and plans to bring the improved cars toEurope again this summer.

Brilliance also partners with BMW. Theirjoint venture in Shenyang produced 32,249BMW 3-series and 5-series sedans last year,up 35.9 percent from 2006.

— Kevin Huang

BYD Auto Co. plans to rely on electrics andhybrids to become an important automakerin China.

Its parent, BYD Co., is the largestmanufacturer of rechargeable lithium ionbatteries in China.

BYD Auto plans to start selling its firstplug-in hybrid car, the F6DM, in the secondhalf of 2008. Its first electric-powered car is

scheduled to arrive in showrooms in 2009.In 2003, BYD entered the auto industry and

started to make standard gasoline-poweredautos. Sales reached 94,683 in 2007, a 57.5percent increase over 2006.

Preferential policies would help BYD buildsales of hybrids and electrics. But so far, theChinese government has not adoptedincentives.

The company wants to start volumeexports to top markets as early as the secondhalf of this year or early 2009. BYD Autoshowed vehicles at the Detroit auto show inJanuary and the Geneva show in March.

BYD exported about 10,000 gasoline-powered cars in 2007, mainly to Russia andthe Middle East.

— Kevin Huang

Chongqing Changan Automobile Co. hasjoined the rush by Chinese automakers todevelop their own brands.

The company plans to develop sevensedan platforms in the coming three years tobring more models of its own brands tomarket.

Many Chinese still regard Changan as onlya small-car manufacturer, so the company’smajor challenge in the coming years will be

to establish high-quality larger vehicles.Changan, with headquarters in the

southwest China city of Chongqing, soldabout 360,000 small vans and small pickupsin 2007. It plans to sell 450,000 units thisyear.

The company used to be China’s leadingsmall-van maker but was overtaken byGeneral Motors’ joint venture, SAIC-GM-Wuling Automobile Co.

The first Changan brand vehicles to marketwere the Benben small car in late 2006 andthe Joice seven-seat wagon in 2007. Earlierthis year, Changan launched the CV8 sedan.

With partner Jiangling Motors Corp.,Changan also launched another seven-seatwagon, the Fengshang, in 2006 and theFenghua small sedan in 2007. The two carscarry Jiangling’s Landwind badge.

— Kevin Huang

Chongqing Changan Automobile Co.No. 260 Jian Xin East Road, Jiang Bei DistrictChongqing 400023, P.R. China(86) 23-6759-0114, www.changan.com.cnTop executive: Yin Jiaxu, president

2007 2006

Capacity 150,000 150,000Production 60,516 19,212Unit sales 55,515 17,974Models produced: CM8, Jiexun Benben

Ownership:Nanfang Industrial Automobile Co. 54%Public shares 46%

Domestic JV: Jiangxi Jiangling Holding Co.No. 99 Liantan Town, North Denghu Road, Nanchang CityJiangxi Province 330200, P.R. China(86) 791-5216-666, www.landwind.comTop executive: Lu Shuifang, general manager

2007 2006

Capacity 50,000 60,000Production 9,820 14,509Unit sales 16,323 14,070Models produced:Landwind, Baowei, Fengshang

Ownership:Chongqing Changan

Automobile Co. 50%Jiangling Motors Co. 50%

BYD Auto Co.No. 2 Yadi Road, Xinxing Industry GardenHigh-Tech Industrial Development ZoneXian City, Shaanxi Province 710119, P.R. China (86) 29-8888-9999, www.bydauto.com.cn Top executive: Wang Chuanfu, president

2007 2006


Models produced:Flyer, F3Ownership:BYD Co. 99%Shaanxi Investment Group 1%

Shenyang Brilliance Jinbei Automotive Co.No. 39, Dongwang Street, Dadong District, Shenyang City, Liaoning Province 110044, P.R. China(86) 24-3166-6666, www.brilliance-auto.com.cnTop executive: Qi Yumin, president

2007 2006

Capacity 145,000 140,000Production 125,313 73,999Unit sales 114,317 73,057Models produced: Splendor, Junjie, Zunchi

Ownership:Brilliance Automobile Holdings 51%JinBei Automobile Co. 39%Dalian Huaxia North Investment Co. 10%

BRILLIANCE SPLENDOR, OR BS4

Chery Automobile Co. dreams of sellingvehicles in North America and Europe. Butfirst it needs to make its cars safe andreliable and rid itself of a cheap-car image.

Slower growth should give Chery breathingroom to change. Chery grew by 22.1 percentin 2007, well below its 57.6 percent growth in2006.

“Chery already has a certain volume. Thatgives them time to really slow down,” saysYale Zhang, director of emerging marketsvehicle forecasts at CSM Worldwide. “NowChery is turning its attention to issues ofstrategy, marketing and quality.”

Yin Tongyao, Chery’s president, says thatquality, not quantity, is Chery’s main focus.

“North America and Europe have verytough and demanding safety and emissionlaws that our vehicles do not represent yet,”Yin says. “Overall, the quality of the Chinesesupply base is improving, but it is not asgood as it should be.”

To improve quality, says Yin, “Chery is

sourcing more and more from globalsuppliers.”

Global suppliers, of course, are keen totake advantage of Chery’s anticipated growthand have flocked to Chery’s hometown,Wuhu. ArvinMeritor Inc., Tower AutomotiveLLC and Johnson Controls Inc. have jointventures with Chery in Wuhu.

In late 2007 Chery opened its third car

plant in Wuhu. The plant boosts Chery’sannual capacity by 300,000, to 700,000vehicles.

Including exports, Chery’s sales reached489,259 units in 2007, just shy of ShanghaiGeneral Motors’ domestic sales in China.

By working with experienced globalautomakers such as Chrysler LLC and FiatAuto S.p.A., Chery is further strengtheningits operations.

Phil Murtaugh, Chrysler’s Asia chief, saysChrysler’s deal with Chery is a “25-year,broad, long-term strategic cooperation.”

For Chrysler, Chery will produce a smallcar for South America by mid-2008. Cherydeclines to comment on the expected datefor entry into North America.

For Fiat, Chery is expected to assemble kitsof the Linea, Grande Punto and Alfa 159beginning in early 2009. Full localizedproduction of the three cars is expected tobegin in late 2009.

— Namrita Chow

Chery Automobile Co.No. 8 Changchun Road, Economic-Technological Development AreaWuhu City, Anhui Province 241009, P.R. China(86) 553-5923-805, www.chery.cnTop executive: Yin Tongyao, president & general manager

2007 2006


Models produced:QQ, A520, Easter, New Qiyun,Tiggo, Easter Cross, V2, KarryOwnership:Chery Automobile Co. 100%

CHERY A3

D O M E S T I C A U T O M A K E R S 23

China FAW Group Corp., China’ssecond-largest domestic automaker,wants to build momentum with itsown brand in 2008.

Sales of FAW’s Besturn brand,which means “best turn,” reached23,279 in 2007 from 4,230 in 2006.Besturn competes with the BuickRegal and Ford Mondeo. Fewdomestic models are competing inthe mid-sized sedan segment.

Sales of the Red Flag brand, wellknown for transporting highgovernment officials, slid 41.3percent to 2,584 units. FAW faces adifficult challenge to attractmainstream customers to thehistoric brand. Red Flag carsmainly are used for governmentpurposes.

A new three-box sedan similar tothe Volkswagen Jetta will debut byyear end, and a bevy of new modelsincluding a small sedan and an SUVare being developed, say FAWsources. FAW is studying how to sellthe new models under its twobrands, Red Flag and Besturn.

FAW plans to expand its productlineup from small cars to luxurycars on four platforms underdevelopment. The automaker said itwill spend $1.83 billion to developnew vehicles through 2015,including cars and commercialvehicles. A staff of 1,600 engineersworks in its r&d center inChangchun.

FAW shares resources andtechnologies with its joint-venturepartners, Toyota Motor Corp. andVolkswagen AG. It also makesMazda cars under an agreementwith the Japanese automaker. TheBesturn is based on the Mazda6

platform, and the Red Flag HQ3 isbased on Toyota’s Majesta platform.

Despite its efforts to develop newvehicles, FAW is widely regarded asa slow-moving state-ownedautomaker, particularly comparedwith such domestic rivals asShanghai Automotive IndustryCorp. and Chery Automobile Co.

But FAW’s joint ventures enjoyeda good year in 2007. FAW-Volkswagen sales last year climbed

35.9 percent to 469,169 units. Thehot-selling VW Jetta posted sales of201,131 units. FAW also has startedproducing the Jetta in its Chengduplant, with current capacity of50,000 units.

Sales of FAW’s joint venture withToyota, Tianjin FAW Toyota MotorCo., rose 29 percent to 268,648 unitsin 2007. The venture is expected tobuild its fourth assembly plant, inChangchun, with capacityestimated at 100,000 units per year.That will bring the venture’s totalcapacity to about 520,000 units ayear.

FAW says it will become the firstChinese automaker to operate aplant in Mexico. It set up a jointventure with a local partner toproduce two FAW-badged smallcars for Mexico and CentralAmerica by 2010.

— Lan LanCRAIN COMMUNICATIONS INC.

Staff


Keith E. CrainPublisher and Editor-in-ChiefPeter BrownAssociate Publisher and Editorial DirectorDavid SedgwickEditor, Automotive News

Editorial staffCharles ChildE-mail: [email protected]: (313) 446-0365Fax: (313) 446-0383

Larry SchlagheckAdvertising [email protected]: (313) 446-6790

autonews.comJohn FItzgeraldDirector of Business Planning and Online [email protected] Phone: (313) 446-1679

[email protected]: (888) 446-1422 (U.S. & Canada)(313) 446-1662 (all other locations)

U.S. 1 year, $155; 2 years, $266,Canada $239 (U.S.); other countries, $395,Single copy sales, $5 per issue plus shipping

Keith E. Crain Rance CrainChairman President

M.K. Crain M.P. CrainTreasurer Secretary

Robert C. AdamsGroup Vice President/Technology, Manufacturing,Circulation

WIlliam A. MorrowExecutive VicePresident, Operations

G.D. Crain Jr.Founder (1885-1973)

Mrs. G.D. Crain Jr.Chairman (1911-1996)

FAW BESTURN

2008 Guide to China’s Auto Market

Editors: Charles Child,Mary Raetz

Correspondents: Gary Anglebrandt, Namrita Chow, Kevin Huang, Lan Lan, Alysha Webb, Yang Jian

Production: Terry Driscoll,Larry Williams

China FAW Group Corp.No. 821 Dongfeng St., ChangchunJilin Province 130011, P.R. China(86) 431-8765-5827, www.faw.com.cnTop executive: Zhu Yanfeng, general manager

2007 2006

Capacity 200,000 200,000Production 183,651 202,000Unit sales 180,280 197,000Models produced: Charade, Vizi,Vela, Weizhi

Ownership:China FAW Group Corp. 51%Tianjin Automotive

Industry Corp. 34%Public shares 15%

Domestic JV: Tianjin FAW XialiAutomobile Co.

Lilou Nan, Zhong Bei Xie Xiang, Xiqing DistrictTianjin Province 300380, P.R. China(86) 22-8791-5000, www.tjfaw.com.cnTop executive: Wang Gang, general manager

2007 2006

Capacity 100,000 100,000Production 82,665 57,804Unit sales 81,947 56,613Models produced: Red Flag, Mazda6,Besturn

Ownership:China FAW Group Corp. 64%Public shares 36%

Domestic JV: FAW Car Co.No. 4888 Weishan Road, High Technology Development Zone, Changchun City, Jilin Province 130012, P.R. China(86) 431-8578-1576, www.fawcar.com.cnTop executive: Zhang Pijie, general manager

Global JVs:Tianjin FAW Toyota Motor Co. – Tianjin –Toyota Vios, Corolla, New Corolla, Crown, Reiz()Sichuan FAW Toyota Motor Co. – Chengdu,Sichuan Province; Changchun, Jilin Province –Toyota Land Cruiser, Prado, Prius (Page 17)FAW-Volkswagen Automotive Co. –Changchun, Jilin Province – Audi A4, A6; VWJetta, Bora, Sagitar, Golf, Magotan, Caddy(Page 18)

D O M E S T I C A U T O M A K E R S24


In the United States, it would be calledteaching the elephant to dance. DongfengMotor Corp., a large state-ownedautomaker, wants to build its own brand oflight-duty vehicles. Most of Dongfeng’svehicles are trucks and commercial buses.

Dongfeng is building an r&d center and aplant in Wuhan to develop passengervehicles, with a total investment of about$1.33 billion.

The plant, scheduled to start massproduction in early 2009, will have anannual capacity of 160,000 vehicles.Capacity will be expanded to about 330,000with the second stage, which is scheduled tostart construction in 2010.

The automaker says the Wuhan plantmainly will produce mid-sized, large andluxury passenger vehicles.

Dongfeng also is acquiring other Chineseautomakers to build its brands.

The company will take over HafeiAutomobile Group and Dongan Auto EngineCo. in the first half of this year. The twocompanies now are subsidiaries of ChinaAviation Industry Corp.

Hafei, of Haerbin City, is a minivan andsmall-car manufacturer that sold about240,000 vehicles last year. Dongan mainlyproduces small transmissions and 1.0- to1.3-liter engines.

China Aviation will transfer control of thetwo subsidiaries by setting up a jointventure with Dongfeng.

Also, Dongfeng will increase production ofDongfeng-badged minicars at DongfengYuAn Vehicle Co. in Shiyan City, Hubeiprovince, this year.

Dongfeng YuAn is a joint venture ofDongfeng Motor and Chongqing’s YuAnGroup, which produces components andmotorcycles.

Annual capacity for the minicars is 100,000units initially. Eventually, the partners

DONGFENG JINGYI

Dongfeng Motor Corp.No. 1 Dongfeng Ave., Wuhan Economic-Technological Development AreaWuhan City, Hubei Province 430056, P.R. China(86) 27-8428-5000, www.dfmc.com.cnTop executive: Xu Ping, general manager

2007 2006

Capacity 40,000 40,000Production 19,266 19,237Unit sales 22,341 18,818Models produced: Dongfeng Future,Joyear

Ownership:Dongfeng Motor Co. 75%Liuzhou Industrial Holding Co. 25%

Global JVs:Dongfeng Honda Automobile Co. – Wuhan, Hubei Province – Honda CR-V,

Civic (Page 13)Dongfeng Yueda Kia Automobile Co. – Yancheng City, Jiangsu Province – Kia

Carnival, Optima, Cerato, Rio, Sportage, Accent (Page 13)Dongfeng Motor Co./Dongfeng Nissan Passenger Vehicle Co. – Guangzhou,

Guangdong Province – Nissan Bluebird, Bluebird Sylphy, Geniss, LivinaGeniss, Tiida, Teana, Sunny (Page 14)

Dongfeng Peugeot Citroen Automobile Co. – Wuhan, Hubei Province –Citroen Fukang (ZX), C2, Elysee, Picasso, Kaixuan (C-Triomphe), Peugeot 206, 307 (Page 16)

Zhengzhou Nissan Automobile Co. – Zhengzhou, Henan Province – Nissan Paladin (Page 14)

Domestic JV: Dongfeng Liuzhou Motor Co.No. 286 Pingshan Ave., Liuzhou CityGuangxi Province 545005, P.R. China(86) 772-3281-218, www.fxauto.com.cnTop executive: Cheng Daoran, general manager

expect to increase capacity to 200,000 units.The minicars will have engines withdisplacements ranging from 0.8 liters to 1.3liters.

At affiliated plants in Liuzhou andZhengzhou, Dongfeng Motor produces asmall number of pickups, SUVs and seven-seat vans. Total output was about 23,000units last year.

Dongfeng can rapidly boost productioncapacity of its own brand of cars in thecoming years. But can it market thevehicles? The company mainly hasproduced commercial vehicles, whichlargely depend on business-to-businessrelationships, not marketing skills, to sell.

Besides establishing its own brand of light-

duty vehicles, Dongfeng also must keepgood relations with all of its foreignpartners: PSA/Peugeot-Citroen SA, NissanMotor Co., Honda Motor Co. and Kia MotorsCorp.

Here are the 2007 sales of DongfengMotor’s joint ventures with globalautomakers:■ Dongfeng Nissan Passenger Vehicle Co.:271,915, up 33.6 percent year on year.■ Dongfeng Peugeot Citroen AutomobileCo.: 207,255, up 2.9 percent.■ Dongfeng Honda Automobile Co.:127,086, up 100.5 percent.■ Dongfeng Yueda Kia Automobile Co.:101,427, down 11.8 percent.

— Kevin Huang

D O M E S T I C A U T O M A K E R S 25

Zhejiang Geely Automobile Group wants tojump-start growth in 2008.

Geely sales grew by a mere 7.0 percent in2007, well below the 35.1 percent increase in2006 for China’s auto industry.

In 2007, Geely launched six redesignedvehicles. Geely plans four new launches in2008: the China Dragon sporty car, KingKong hatchback, LC-1 economy hatchbackand TX4 taxi.

In the next five years, Geely says it hasplans for 15 new models, including a hybrid.

The automaker’s plans are so ambitiousthat some analysts doubt it can pull themoff.

“It will be very difficult for them to launchall these planned models, as there is stilllimited brand reception for Geely in thedomestic market,” says John Zeng, seniormarket analyst for Asian automotiveresearch at Global Insight Inc. “It will take along time for Geely to build a decentimage.”

Nevertheless, Zhejiang Geely AutomobileGroup says it plans to sell 230,000 vehicles in2008, up 25.9 percent from 2007. Geely sold

184,176 cars in China and exported 29,063cars in 2007. Another 35,337 cars were madeby subsidiary brand Maple.

To realize its growth plans, Geely mustincrease production capacity. Four newplants are expected to start production byyear end. The plants will push Geely’s annualcapacity to 500,000 units, up from thecurrent 350,000.

The new plants in Xiangtan, Jinan,Lanzhou and Cixi are outside Geely’s home

in Zhejiang province.Last year Geely opened contract

manufacturing bases in Indonesia, Russiaand Ukraine. This year, Geely says it willbuild a plant in Mexico. The expected annualtotal capacity of the Mexico plant is 300,000units.

“The plant will serve all of North, Southand Central America,” says Li Shufu, Geelychairman and founder.

In 2006 Geely said it wanted to enter NorthAmerica in 2008. But the company has sincerevised its strategy. “Entering a marketdepends on preparation,” Li says.

In 2007 Geely bought a 23 percent stake inGreat Britain taxi maker Manganese BronzeHoldings LLC. Geely also formed a jointventure with Manganese Bronze to producethe London Taxi in China. The TX4 modelwill begin production this year with 1,000vehicles expected in its first year.

Shanghai London Taxi International Co.’sproduction is based at Shanghai MapleAutomobile Co.’s operations in JinshanDistrict, Shanghai.

— Namrita Chow



26

In 2008, the challenge facing SUV makerGreat Wall Motor Co. is to gain ground in cars.

Great Wall received government approvalto manufacture cars in late 2007. It launchedits first small car, the Gwperi, in February.With a starting retail price of about $6,200,the Gwperi will compete against the CheryQQ and Changan Benben.

In addition, Great Wall has developedother new cars, including the Florid,Coolbear and i7.

In 2007, Great Wall’s domestic sales rose61.6 percent to 64,732 units and exportstotaled 51,394 units. The domestic growthcame mainly from the Hover, the top-sellingSUV in China with sales of 57,752. Closebehind was the Chery Tiggo with sales of50,102.

Great Wall has ambitious plans for

GEELY KING KONG

GREAT WALL GWPERI GREAT WALL HOVER

2007 2006


Models produced:Hover, Safe, Sing

Ownership:Baoding Woerte 35%Baoding Municipal

Government 24%H Shares 38%Other 3%

Great Wall Motor Co.No. 2266 South of Chaoyang Road, Baoding CityHebei Province 071000, P.R. China(86) 321-2197-855, www.gwm.com.cnTop executive: Wang Fengying, president

2007 2006


Models produced:Haoqing, Merrie, King Kong,Vision, Freedom Ship

Ownership:Li Shufu 72.7%Others 27.3%

Zhejiang Geely Automobile GroupNo. 1760 Jiangling Road, Binjiang District, Hangzhou CityZhejiang Province 310051, P.R. China(86) 571-8776-6666, www.geely.comTop executive: Li Shufu, chairman

overseas. The Baoding automaker hasexported to more than 120 countries.

Great Wall plans to launch all of its vehiclesin Europe in the second half of 2008,

Chairman Wei Jianjun said late last year.Great Wall started selling the Hover in Italyand Romania.

— Lan Lan

2007 2006


Shanghai Maple Automobile Co.Fengling Industrial Zone, Jinshan District,Shanghai City, P.R. China(86) 21-5136-9990, www.c-sma.comTop executive: Jinliang Liu, general manager

Models produced: Haiyu, Haixun, Haishang, Haifeng, Haiyue

Ownership:Zhejiang Geely Automobile

Holdings Group 90%Zhejiang Huapu Investment Co. 10%

Shanghai Automotive Industry Corp.’s jointventures with General Motors andVolkswagen AG produce some of China’sbest-selling cars.

Now, subsidiary SAIC Motor wants its ownpiece of China’s rapidly growing automarket. Last year the company launched itsown brand, Roewe, with the 750 car.

The 750, which starts at $32,620, launchedin March 2007 and sold a modest 16,549units in 2007. The 750 competes in the mid-sized segment with 24 other cars.

The car “makes a significant breakthroughin this market segment, which has beenmonopolized by overseas brands for a longtime,” SAIC says.

SAIC took another step to build its ownbrands in December when it acquiredNanjing Automotive Corp., which islaunching the MG brand in China andEurope.

A slight complication is that the Roewe 750and Nanjing Auto’s MG7 compete in thesame segment.

“The Roewe brand is most customized forChinese customers, while MG will keepmore of an original English taste,” says JohnZeng, senior market analyst at Global InsightInc. He says MG “will be more sporty andwill focus more on the overseas market.”

The partnership also gives SAIC Motoraccess to Nanjing Auto’s plant in Longbridge,England.

Says Chen Hong, president of SAIC Motor:“The British business will become SAIC’snew platform for Europe.”

Both SAIC Motor and Nanjing Auto willdevelop cars on SAIC’s W261 platform. SAICwill make the Roewe 550 on the platform,while Nanjing Auto will make the MG5.

In 2007, SAIC and joint ventures sold morethan 1.69 million vehicles, a 25.8 percentincrease over 2006, SAIC says.

SAIC’s joint venture with General Motors— Shanghai General Motors Corp. — soldjust shy of half a million units. SAIC’s jointventure with Volkswagen — ShanghaiVolkswagen Automotive Co. — sold 456,424units, according to Automotive ResourcesAsia.

— Namrita Chow



28

ROEWE 750

Shanghai Automotive Industry Corp.No. 390 Wukang Road, Xuhui DistrictShanghai 200031, P.R. China(86) 21-2401-1000, www.saicgroup.comTop executive: Hu Maoyuan, president

Global JVs:Shanghai GM Corp. – Shanghai – Buick LaCrosse, Regal, Park Avenue, Royaum, Excelle,

Excelle HRV; Cadillac SLS (Page 12)Shanghai GM Dongyue Motors Co. – Yantai, Shandong Province – Chevrolet Sail, Sail

SRV, Epica, Aveo, Lova (Page 12)SAIC-GM-Wuling Automobile Co. – Liuzhou, Guangxi Province – Chevrolet Spark

(Page 12)Shanghai GM (Shenyang) Norsom Motors Co. – Shenyang, Liaoning Province –

Buick GL8 (Page 12)Shanghai Volkswagen Automotive Co. – Shanghai – VW Polo, Passat, Touran, Santana,

Santana 3000, Skoda Octavia (Page 18)

Ownership:SAIC Group 83.83%Public shares 16.17%

2007 2006

Capacity 50,000 –Production 17,346 –Unit sales 16,549 –

Models produced: Roewe 750

Ownership:SAIC Motor Corp. 60%Shanghai Automotive Co. 40%

SAIC Motor Manufacturing Co.Building 3, 615 Ningqiao Road, Jinqiao, Pu Dong DistrictShanghai 201206, P.R. China(86) 21-5899-9522, www.roewe.com.cnTop executive: Wang Xiaoqiu, general manager

Guangzhou Automobile Industry GroupFloor 19-23, Chengyue Mansion, No. 448 Middle of Dongfeng RoadGuangzhou City, Guangdong Province 510030, P.R. China(86) 20-8315-0411, www.gaig.com.cnTop executive: Zhang Fangyou, president

Global JVs:Guangzhou Honda Automobile Co. – Guangzhou, Guangdong Province

– Honda Accord, Fit, City, Odyssey (Page 13)Honda Automobile (China) Co. – Guangzhou, Guangdong Province –

Honda Jazz (Page 13)Guangzhou Toyota Motor Co. – Guangzhou, Guangdong Province –

Toyota Camry (Page 17)

At the end of 2007, Guangzhou AutomobileIndustry Group finally announced plans todevelop its own brand of passenger vehicles.

The company is in an enviable positionbecause it operates two highly profitablejoint ventures, one with Toyota Motor Corp.and the other with Honda Motor Co. But itfaced growing pressure from the Chinesegovernment to develop its own brand.

Guangzhou Auto is one of six large state-owned automakers in China, along withChina FAW Group Corp., ShanghaiAutomotive Industry Corp., Dongfeng MotorCorp., Beijing Automotive Industry HoldingCorp. and Chongqing Changan AutomobileCo. But it is the only one without its ownpassenger vehicle brand.

The company plans to spend $916 millionby 2010 to launch its own brand. The first

model, a mid-sized sedan, will be brought tomarket in late 2009 or early 2010.

In November at the Guangzhou auto show,Guangzhou Auto unveiled three conceptcars, a four-door car with coupe styling andtwo sedans with battery or hybrid power.The company says it eventually will build afull range of passenger vehicles.

The company is building a car plant andan engine plant in Guangzhou with annualcapacity of 100,000 units per year.

Guangzhou Auto’s president, ZhangFangyou, says the company has establisheda cost-competitive supply system withassistance from Toyota and Honda.

The joint ventures with Honda and Toyotaaccounted for 8.9 percent of China’s 5.2million passenger vehicles in 2007.

Guangzhou Honda Automobile Co. sold

295,299 cars in China in 2007, up 13.5percent from 2006. The company plans tosell 340,000 cars this year.

The company now runs two plants inGuangzhou, with annual joint capacity of360,000 units.

Guangzhou Toyota Motor Co. sold 170,294Camry sedans in 2007. The companylaunched the Camry in May 2006 and willstart making a second model, the Yarishatchback, in mid-2008.

Guangzhou Toyota expects to sell 175,000Camry units and 35,000 Yaris units in 2008.

Guangzhou Toyota has a plant with annualcapacity of 200,000 units and is building asecond plant. The company plans to build athird model, the Highlander crossover,starting in April 2009.

— Kevin Huang



29

Hebei Zhongxing Automobile Co.No. 860, Jianguo Road, Baoding CityHebei Province 071000, P.R. China(86) 312-2190-600, www.zxauto.com.cnTop executive: Xiao Wei, general manager

2007 2006


Models produced:Admiral, Chiye, Infinite

Ownership:Hebei Tianye Automobile

Group Co. 67%Taiwan Unite

Leaders Co. 33%

2007 2006


Models produced:Refine, Rein

Ownership:Anhui Jianghuai

Auto Group 28%Public shares 72%

Anhui Jianghuai Automobile Co.No. 176 Dongliu Road, Hefei CityAnhui Province 230022, P.R. China(86) 551-2296-666, www.jac.com.cnTop executive: Zuo Yanan, president

Rongcheng Huatai Automobile Co.Rongshan Avenue, Rongcheng CityShandong Province 264300, P.R. China(86) 631-7554-888, www.huataixiandai.comTop executive: Chen Qingchun, president

2007 2006


Models produced:Galloper, Terracan, Santa Fe

Ownership:Hengtong Group Co. 100%

2007 2006


Models produced: MazdaFamilia, Freema, Haima3

Ownership:Haima Holding Group 50%China FAW Group Corp. 49%Hainan Provincial

Government 1%

FAW Haima Automobile Co.Jinpan Industry Development Area, Haikou CityHainan Province 570216, P.R. China(86) 898-6682-0333, www.hnmazda.comTop executive: Qin Quanqyan, general manager

2007 2006


Models produced: Lifan 520 Ownership:Chongqing Lifan

Industry Co. 100%

Chongqing Lifan Automobile Co.No. 60 Shangqiao Zhangjiawan, Sha Pingba AreaChongqing City, 400037, P.R. China(86) 236-1663-000, www.auto.lifan.comTop executive: Yin Mingshan, CEO

Hafei Motor Co.No. 15 Youxie Street, Pingfang DistrictHarbin City, Heilongjiang Province 150066, P.R. China(86) 451-8658-1122, www.hafeiauto.com.cnTop executive: Liu Tao, president

2007 2006


Models produced:Dingo, Lobo, Saibao

Ownership:Harbin Aviation Industry

Group Co. 74%Others 26%

Hunan Jiang Nan Automobile Co.Nanzhushan, Xiangtan CountyHunan Province 411207, P.R. China(86) 732-2518-018, www.jncars.comTop executive: Li Xubing, president

2007 2006


Models produced:Jiangnan Chuanqi, Alto,Jingling

Ownership:Zotye Holding Group 70%Jiangnan Automobile

Manufacture Co. 30%

Jiangxi Changhe Automobile Co.No. 208 Xingchang East Road, Jindezhen CityJiangxi Province 333002, P.R. China(86) 798-8462-778, www.changheauto.comTop executive: Li Yao, president

2007 2006


Models produced:Ideal

Ownership:China Aviation Technology

Industry Co. 63%Public shares 37%

S U P P L I E R S30

China’s auto market grew by doubledigits in 2007, but that didn’t shieldsuppliers from the same issuesdogging suppliers worldwide: risingraw material and energy prices.

And as costs rose, car prices inChina continued to decline.

“We had a raw material effect thatwe had to pass to the OEMs. Thatwas a real challenge,” said ChristianMarsais, group vice president ofChina for Valeo SA.

Suppliers also faced rising laborprices in China and a shortage ofexperienced managers andengineers. The shortage was causedby limited supply and strongdemand. Barely a month passed in2007 without a foreign supplierannouncing it was adding a newplant or opening a research andengineering center.

For suppliers looking to sourceparts in China for export, the yuan’sappreciation hurt.

Long pegged at about 8.3 to the

dollar, the yuan’s value began tofloat in July 2005. The paceaccelerated in 2007, when itappreciated 7 percent against thedollar. That made it more expensivefor overseas customers to buy partsmade in China. In mid-March, thedollar traded for 7.1 yuan.

Low volumes per model alsoplagued suppliers as new modelscontinued to drive sales in China in2007. Low production runs made itharder for auto manufacturers andsuppliers to achieve economies ofscale.

The continued growth of Japanesebrands, especially Toyota, made 2007a tough year for some suppliers, saidTodd Fortner, president of ChangshuAutomotive Trim Co.

“If you’re not already a Japanesesupplier, it’s very hard to get intotheir supply chain,” he said.

Suppliers don’t expect much reliefin 2008. Upward pricing pressurewill remain, although Valeo’sMarsais expects the prices of someraw materials to stabilize.

Oil prices will keep rising, though.And, suppliers figure, domesticinflation will force the Chinesegovernment to allow the yuan toappreciate faster.

— Alysha Webb

Suppliers in China■ For a list of

global automotivesuppliers in China,go to: autonews.com/chinasuppliers

■ To have yourcompany includedon the list, sendan e-mail to:[email protected]

Suppliers face rising prices, shortage of skills

MARK RALSTON/AFP/GETTY IMAGES/NEWSCOM

WORKERS PREPARE FOUR-CYLINDERENGINES AT A PLANT IN WUHU, CHINA.

AN AUTONEWS 04-14-08 D 1 AUTONEWS

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