Gasgoo.com (Shanghai September 9) - Does being able to make dependable and successful commercial vehicles translate to making good passenger cars? That is the question facing Jiangxi-based Jiangling Motors now.
Jiangling (JMC) halted production of its only sedan, the Fenghua (pictured), in June. However, JMC Board Chairman Wang Xigao affirmed his manufacturer's interest in the sedan market, nbd.com.cn reported today. "The sedan program is currently within the planning phase," Mr. Wang said, adding that "JMC will not abandon the market."
JMC is currently in a very delicate relationship with Changan and Ford. Both JMC parent Jiangling Group and Changan invested 500 million yuan ($60.49m) to open the Jiangling Holding Company in December 2004. The company would go on to hold 41.03 percent of JMC, becoming the manufacturer's largest shareholder.
However, Changan's ability to support JMC started to slip, forcing the manufacturer to search out cooperation with Ford. JMC's sedan business was an important way for it to balance out its relationships with Changan and Ford.
An unnamed source close to JMC said that he was unconfident in the manufacturer's ability to progress in the sedan segment. "The Fenghua has not had any effect on the market for three years without the slightest effect," he commented. "JMC lacks the technology and R&D ability to manufacture a sedan."
Jiangling Holding has already invested 3 billion yuan ($470.2m) to open a new factory in Nanchang with a production capability of 300,000 vehicles. The factory is planned to be completed by the end of 2012. Industry analysts have pointed out that this will bring JMC's total production capability up to 500,000 vehicles, far above the amount needed solely for the commercial vehicle market.
