Yangzhou Automobile Industry Cluster

Automobile industry is a typical industry in the medium stage of industrialization with high degree of industrial association. With over 40 years' development, the automobile industry in Yangzhou with a certain scale has become one of pillar industries of city's industrial economy.

1. Analysis on the present developing situation of Yangzhou automobile industry cluster
By the end of 2003, there were over 150 enterprises engaged in automobile industry with 12 enterprises for the production of entire car products and 140 enterprises for the production of automobile components and parts. With gross automobile industrial output vale of RMB 10 billion (enterprises with a certain scale RMB 7 billion, automobile parts industry account for over 50%), the automobile and automobile parts industries have been established with passenger cars and special cars as the leading products and characteristic parts such as passenger-car chassis, diesel engine, plastic fuel tank of automobile and piston ring.

1) Entire car
Characteristic advantages have been preliminarily established in the field of passenger car and special car production. There are 2 enterprises (Yaxing and Shanghai & Yizheng Companies) listed on the national enterprises catalog of entire car production, 10 repacking enterprises and over 600 products in product summary of country's bulletin.

Ⅰ . Passenger car. With annual production capacity of 25,000 cars (Yaxing Group 20,000 and Jiangdu Hongyun 5,000), there are complete varieties of cars such as large and medium sized cars, senior, medium or ordinary grade cars, gasoline motor cars and diesel cars as well as buses running both between cities and within the city with the height of 4-12 meters and monolayer or double deck. There are 20,000 cars in Yaxing Group and 5000 cars in Jiangdu Hongyun Company. Yaxing Group was ranked in the 5 th place on the sales list of 2003 domestic medium size passenger car industry.

Ⅱ . Special car. Up to now, there is annual production capacity of over 10000 cars (Zhongji Tonghua 5000 cars, Chengda 2000 cars, Yinbao 2000 cars, Goddess 1000 cars). There are many semi-trailer varieties of 10-40T medium and light type cars and 100T heavy cars. Special cars include tank type and carriage type automobiles. Special vehicles include series of cars such as motor sweeper, refuse collection car and wrecker. The market share of Tonghua heavy semi-trailer is over 30%, and the sales of tank type automobile, which is developed by the imported technology, take the lead in the domestic market. With high technology, the various special vehicles of Shengda Company are ranked in the 3 rd place in the domestic market share.

Ⅲ . Saloon car. The production of the imported multipurpose saloon car (Ceprei) by Shanghai Yizheng Automobile Co., Ltd. began in July, 2002, which filled the blank in our saloon car industry. With the annual production capacity of 20,000 cars, it is expected to have annual production capacity of 50,000 cars at the end of the tenth Five-Year Plan.
2) Automobile parts

The main products are diesel motor, piston ring, plastic fuel tank of automobile, radiator, cylinder liner, automobile air-conditioner, seat, powder metallurgy structural parts, car battery, light, gear box, front and rear axles, car electric machine, interior trim parts, car jigs, etc.
The automobile parts manufacturing industry has formed industrial chains with obvious characteristics. The enterprises engaged in the production of automobile parts with a certain scale and name brand advantages are as follows: Yanghzhou Diesel Motor Co., Ltd., which is one of domestic bases for the production of four-cylinder diesel motor with production capacity of over 70,000 diesel motors in 2003; Yangzhou Yapu Automobile Plastic Parts Co., Ltd., which is the largest domestic base for the production of saloon fuel tank with production capacity of 860,000 plastic fuel tanks and sharing over 50% of the market in the last year, and its scale of production for car radiator and cylinder liner and its market share are ranked top in the country; Yizheng Shuanghuan Piston Ring Co., Ltd., which is the largest domestic base for the production of piston ring with No. 1 production and sales volume in the consecutive over 10 years, and it is also one member of Top 10 enterprises in the world. Furthermore, Yangzhou has a certain advantage in the field of car air-conditioner, car battery, light and internal trim parts. Over 70% of the automobile parts can be supported in radius of 30 kilometers around.

3) Industrial distribution
The automobile production enterprises of the city are mainly distributed in urban area, Yizheng and Jiangdu. In urban area, there are Yaxing and Tonghua engaged in the production of large and medium scaled passenger cars and semi-trailers and some Little Giant enterprises engaged in the production of automobile parts such as plastic fuel tank, water tank and cylinder liner with sound developing foundation. In Yizheng, there are 51 enterprises engaged in the production of automobile and automobile parts, 2 automobile sales enterprises and 2 logistics enterprises (2 enterprises for entire car production, 15 enterprises for key parts production and 19 enterprises for fitting production). With industrial output value of RMB 1.094 billion in 2003 and automobile industry park as the base, the automobile industry in Yizheng has entered a stage of rapid expansion. In jiangdu, the automobile industry develops rapidly, and its production capability for entire car and processing capability for automobile parts increase obviously. The automobile industry has become the pillar industry of industrial economy. Up to now, there are 70 enterprises engaged in the production of automobile and automobile parts (over 50 enterprises with a certain scale). In 2003, the automobile Industry in Jiangdu achieved output value of RMB 2 billion, and its gross economic value accounted for 13% of the city's industrial value among the industries with a certain scale.

2. Analysis on the advantages of the development of the automobile industry
There are many advantages for the quick development of the city's automobile industry. As far as the geographical environment is concerned, located in the Yangtse River delta and the interjunction area of Nanjing and Shanghai economic zone, Yangzhou enjoys a unique geographical advantage; Yangzhou takes the lead in Jiangsu province by accomplishing the construction of highway around the city, and makes it possible for highway transportation from a county to another. With the traffic opening of Ning-Qi railway and the establishment of Runyang Bridge, Yangzhou has formed a great traffic structure with highway and railway network extended in all directions, thus enjoyed a nice traffic advantage; with relatively perfect infrastructure of electricity, tap water, sewage treatment, telecommunication and harbor, Yangzhou enjoys resources superiority. As far as the development of the automobile industry is concerned, Yangzhou enjoys the following advantages:

1) Policy advantages. In order to support and encourage the clustering development of our city's automobile and automobile parts industries, Jiangsu provincial government stipulates that enterprises, which invest in automobile and automobile parts industry in Yanghzou before 2007, can get half their value added tax possessed by local government returned.

2) Joint venture and cooperation advantages. Benz Company and Shanghai Automobile Group are our long-term partners. Shanghai Huizhong Yizheng Light Automobile Factory with main products of Ceprei saloon car and Istana microbus is one of the production bases of Shanghai Automobile Group. Many enterprises such as Hongkong Hongyun, Jiexin, Hongnan and Hongde invest in Jiangdu, and nowadays Jiangdu has become the one of the production bases of Suzhou King Long, Xiamen Golden Tour and Jianghuai JAC passenger car
3) Mechanism advantage. The strategetic regroup of Yaxing Co., Ltd. and Greencool Company, Tonghua Semi-trailer Company and China International Marine Containers (Group) Co. , Ltd., Shengda Special Vehicle and Yaxing Co., Ltd. and the import of advanced management mode have vitalized the enterprises.

4) Supplementary advantage of the industry. The degree of concentration of automobile parts industry is relatively high. Besides providing parts for local automobile manufacturer, the enterprises in Yangzhou also provide automobile parts for entire car production enterprises such Nanjing Yuejin, Suzhou King Long, Yacheng Yueda, Anhui Jianghuai and Wuhu Qirui. Automobile die casting manufacturer, Jiangdu Rongtai Company, has become the supplier of US General Motor Corporation ， Ford corporation, Chrysler, Korea Daewoo Motor Company.

5) Technological and talent advantages. Yaxing Company is the first passenger car manufacturer in the country engaged in the production of entire car by using self-developed chassis. It has ten entire passenger car patents and structure patents, and mastered a lot of special technologies with domestic advanced level. The JS6123H type city passenger car of Yaxing Co., Ltd. had been awarded golden metal in the first national passenger car competition in March, 2003. With rich human resources and talented persons of all kinds, Yangzhou has not only technological, managerial and administrative personnel with high level, but also many senior technicians and specialized workers with special skills. The cost of labor such as sheet metal worker, locksmith and solderer is comparatively low. As far as passenger car manufacturing is concerned, the cost of labor in Yangzhou is only one-fifth that of the developed countries.

3. Developing ways of automobile industry cluster
1) Guiding ideology
Based on the national policies for industrial technologies, seize the opportunities of the great development of domestic automobile market and international automobile industry transfer; put great emphasis on the development of the automobile industry with the aim to implement the strategy of developing the region along the river; strengthen the construction of automobile industry park and attract the elements of production such as capital, technology and talents with the aim to form the clustering development of automobile industry. With the assets regroup and mechanism and system innovation as the orientation and the structural adjustment as leading principle, greatly support the key enterprises in automobile industry and establish a group of leading enterprises engaged in the production of entire car and automobile parts. Improve the market share of passenger car, special car and special vehicle; solidify the foundation for the production of automobile chassis and parts; give priority to the production and research of saloon car and key parts. Establish influential bases for the production and research of saloon car, special car and special vehicle with the aim to enlarge and strengthen the automobile industry.

2) Developing objective
With output value at present prices of over RMB 30 billion in 2010, the automobile manufacturers in the city will sell over 200,000 cars, among which there are 50,000 passenger cars, 100,000 saloon cars and 50,000 special vehicles, 300,000 engines and 2 million automobile fuel tanks. There will be 4-5 leading entire car and automobile parts manufacturers with core competitiveness and annual sales value of over RMB 5 billion.

3) Industrial distribution

Ⅰ . Automobile Industry Park in Yangzhou Development Zone. With planned building area of 2.8 square kilometers and Yaxing, Tonghua and Yangchai at the core, it will focus on the production of passenger car and special car and automobile parts such as diesel motor, water tank, air-conditioner, plastic parts and chassis.

Ⅱ . Yizheng Automobile Electromechanical Industry Park . With the planned park area of 10 square kilometers and Shanghai Automobile Group Yizheng Company and Shanghai Huizhong Light Passenger Car Factory at the core, it will integrate the relative production resources for automobile parts production and emphasize on the development of passenger car, monotype commercial car and automobile parts industries.

Ⅲ . Jiangdu Automobile Industry Park . The planed park area is 1.5 square meters. With Jianghuai Hongyun Company as the leading enterprise and the imported projects of the Second Automobile Factory as the turning point, it will integrate the automobile parts resources such as automobile parts in Hongquan, fittings for oil pump and flow ripple in Dinghuo and camshaft in Zhuanqiao, and emphasize on the development of passenger car, special car and automobile parts lndustries.

4) Key points for the development of Yangzhou automobile industry cluster
Based on the automobile industry parks in Yangzhou Development Zone, Yizheng and Jiangdu, Yangzhou will emphasize on the development of saloon car, passenger car and special car industries. Solve the difficult problems of Yaxing Company in its process of development as early as possible; quicken the strategic regroup of Yangchai and big enterprises or groups; give priority to the development of automobile electronic industry; enlarge and strengthen Little Giant enterprises engaged in the production of automobile parts such as passenger car chassis, engine, fuel tank, piston ring and cylinder liner with the aim to promote the product level of our automobile and parts industries.

Ⅰ . Passenger car
Passenger car manufacturing is our advantage. It is required to solve the problems of Yaxing Company in its process of development as early as possible in order to remold name brand of Yaxing passenger car, increase the market share of large and medium size passenger car and promote product level. Chassis is the key part of passenger car, though Yaxing Group has the annual production capacity of 20,000 passenger car chassis, they are self-supplied. Therefore, it is required to make great breakthrough in the specialized development of passenger car chassis and import technologies through the cooperation and joint investment with well-known enterprises abroad. Based on the self-supply, be capable to provide commercial chassis.
With Yaxing Group as the leading enterprise in high level passenger car production and the automobile industry park of urban development zone as the base, it will concentrate on developing high level passenger car, chassis assembly and spare parts.
With Jiangdu Hongyuan as the leading enterprise in light bus production and the Jiangdu automobile industry park as the base, it will concentrate on developing light bus and spare parts such as internal trim fittings.

Ⅱ . Special car
It will mainly support the special car manufacturers such as Tonghua and Shengda with the aim to convert them into the modern enterprises with high added value, high technological contents and high reliability and environmental protection ability. In Jiangdu, it is required to quicken the project construction of cross-country vehicle and pickup truck, enlarge the production scale of power-line service snorkel and engineering truck, and develop marketable special cars such as refrigerator car and multifunctional car.

Ⅲ . Light vehicles
Seize the opportunities and attract big automobile manufacturers (Group) both at home and abroad to establish saloon car production bases in Yangzhou with the aim to build the saloon car industry as the subject of Yangzhou automobile industry within a short period of time. With Shanghai Yizheng Company and Volkswagen Yizheng base as the leading force and Yizheng automobile indusry park as the base, it will concentrate on developing saloon car, light vehicles and spare parts such as saloon engines and automobile electric fittings.

Ⅳ . Engines and spare parts
Concentrate on developing a group of key automobile components and key spare parts; carry out standardized production with international security, environmental protection and quality verification; continuously improve the technical performance and the level of products, especially the products such as diesel motor, automobile gear box, steering, suspension and brake system, automobile electronic products, automobile plastic fittings and internal trim fittings; quicken the strategic regroup of Yangchai and big enterprises or Groups and give the priority to the development of automobile electronic industry. With Yangchai, Yapu, Shuanghuan and Yingdi as the leading enterprises and Top three automobile industry parks as the bases, it will concentrate on developing a group of automobile parts with high technological contents and wide market prospect such as European Ⅲ engines, plastic fuel tanks, automobile electronics, piston ring, air-conditioner and automobile battery.

Ⅴ . Automobile service industry
In the process of the development of the automobile industry, make the modern marketing perfect and give priority to the development of consumer credit, logistics, maintenance, second-hand car and leasing business with the aim to establish modern automobile industry chain. With Jiangsu Gaoli Group as the leading enterprise, quicken the construction of Yangzhou Automobile Parts Science & Technology City and actively prepare to construct Chian ( East China ) Commercial Car Business Center . Actively support financial insurance industry to be engaged in the automobile industry; improve the concerning service trade level of the whole society through the development of automobile service trade. Gradually transfer automobile industry to automobile industrialization.

5) Key projects selection of Yangzhou automobile industry cluster
In 2003, the Development Planning Committee of the city took the lead in the investigation, queuing and selection of major projects with funds of RMB 100 billion in various industries. There are 24 selected projects in automobile industry with total investment cost of RMB 20 billion, among which there is RMB 2.1 billion for the investment in the near future, RMB 8.8 billion for medium term investment and RMB 9.1 billion for future date investment. It these projects could be finished, there would be RMB 47 billion increased sales value (RMB 5.9 billion in the near future, RMB 19.5 billion in the medium term and RMB 21.6 billion at a future date)

6) Countermeasures for the development of Yangzhou automobile industry cluster
Automobile industry plays a very important role in the construction of manufacturing bases for the international competition. Nowadays, automobile industry is in the new opportunity period for its major development. Therefore, it is required to take the feasible measures to improve the industrial level of automobile industry with the aim to vitalize the development of concerning industries and local economy.

Ⅰ . Strengthen the planning and guidance and optimize industrial distribution. Closely study on the developing rules of automobile industry; combine with the practice according to the orientation of national industrial policies; make the developing ways clear with the aim to achieve the integrated planning of automobile industry. Give full play to the link function of bridge of automobile industry society; stipulate the industry developing planning under the directing of automobile industry society; strengthen the guidance for the automobile industry with the aim to establish a structure for industrial development with prominent stress, coordinate complement and healthy order. As far as the planned distribution is concerned, it is required to emphasize on overall arrangement and gradually establish clustering and scale advantages of automobile industry with the aim to promote the development of the industry.

Ⅱ . Quicken the construction of industrial bases and develop industrial chain. Strengthen the direction, coordination and service for the construction of the automobile industry park; take the operating mode with the adoption of the market principle; integrate various advantages (such as industrial chain advantage, regional advantage, traffic advantage, resources advantage, talents advantage, human advantage and policy advantage); establish industrial platform with the aim to introduce automobile industry to the outside world; actively develop the automobile industry clustering projects; Strengthen the invitation of business and capital attraction; introduce partners for strategic cooperation; quicken the development with the help of foreign enterprises; concentrate the production elements for the development of automobile industry such as capitals, technologies and talents on the parks. On the whole, automobile industry chain has been preliminarily established and the coordination of upper and lower chains of automobile industry is urgently needed to be strengthened. In the process of the establishment of considerably stable automobile industry chain, it is required to enlarge and strengthen the industrial chain and quicken the development of spare parts industry. Meanwhile, it is also required to emphasize on the supply process of industrial chain, especially the after-sale market, with the aim to promote the service level and enlarge the value chain.

Ⅲ . Renovate mechanism and system and quicken the assets regroup. The enterprise is the subject of market competition. Only when the automobile enterprises develop can the whole industry be pushed forward. Yangzhou automobile enterprises must further renovate the system and mechanism, and quicken the establishment of motivating mechanism for the development of enterprises. Push the system reform forward with the property right system reform at the core; reform the system with tolerance and emphasis on the large enterprises and the quality; import the capital, talents and technology; quicken the assets regroup; actively push the system reform and regroup of leading enterprises such as Yaxing Benz and Yangchai with the aim to substitute government stockholder with large enterprises and groups at home and abroad, which have rich industrial experiences and assets. In the process of reform, it is required to quicken the establishment of modern corporate governance structure, set up incentive mechanism, production operation mechanism, sales and management mechanism adaptable to the market competition, and enlarge the market competition subject of Yangzhou automobile industry.

Ⅳ . Accelerate technological innovation and boost the competitiveness. Intensify the consecutive renovating abilities and core competitiveness of automobile manufacturers; establish a complete technological renovating system for the automobile industry; boost the self-developed capabilities of enterprises; require the enterprises with a certain scale to establish their own research and development centers and strengthen their investment; encourage and support enterprises to import advanced technologies, products and means of production; further implement the joint project of industry and colleges or scientific institutes with the aim to form the technological advantage and make the enterprises gain more decision-making power in the future competition.

Ⅴ . Vigorously nurture talent and provide intellectual support. Automobile industry is an industry with dense capital and technology, and it also needs a lot of excellent talents. Key enterprises should nurture more talented people, import excellent talents, nurture mixed type talents and enlarge the senior mechanic team with the aim to establish a developing system for multi-level technological talents and build up bases for the development of high level technical talents of automobile enterprises. Strengthen the talent training and send specialized technical personnel to accept training in colleges and universities, scientific institutes and famous automobile manufacturers with the aim to improve the their qualities; emphasized on the training of technical workers by the means of vocational education, reeducation and on-the-job training with the aim to build up specialized technical teams and mechanic teams with high technology; open the automobile courses with colleges and universities around and within the city in order to increase the training for the automobile talents; import senior managerial talents with the help of various media to recruit managerial talents of all kinds with specialties in order to provide talents for the development and enlargement of our automobile industry.

Ⅵ . Emphasize on the orientation of policies and optimize the service function of government. Strictly execute the national industrial policies; seize the opportunities that the state adjusts its industrial policy and provincial government affords preferential policy for our automobile industrial development; carry out the policies and work out the policies concerning technical reform, discount interest and land leasing with the aim to support key enterprises, products and projects; actively declare the bonded warehouse of entire car and spare parts to the national authority and arrange about the establishment of bonded area for processed products with the aim to create excellently soft and hard environment for the development of automobile industry.