Guangzhou's auto industry remains robust

Unlike the general slowdown of the world economy, the automobile industry in south China's Guangzhou city continues to maintain its robust momentum.

Guangzhou is expected to assemble 955,000 automobiles with an industrial output of 210 billion yuan this year, compared to 162.23 billion yuan in 2007, according to a report on Guangzhou's auto industry development released by Guangzhou Academy of Social Sciences earlier this year.

The city is also expected to realize a gross industrial output of 50 billon yuan from the auto component manufacturing industry in 2008, compared to 30.92 billion yuan last year.

Guangzhou vice-mayor Gan Xin attributed the success story of Guangzhou's automobile industry to the city's strategy to partner with global auto and component firms including Toyota, Honda, Nissan and Hino.

The partnership finds expression not only in production and research and development (R&D), but also in the related service sectors.

"Thanks to the strategic cooperation, a coordinated development model has taken shape ranging over sedans, buses, trucks, special vehicles and components," he said. "And auto industrial bases headed by Dongfeng Nissan, Guangzhou Honda and Guangzhou Camry have been established."

Official statistics show Guangzhou had secured 391 autos and component projects involving capital inputs of 6.29 billion (U.S. dollars) including overseas capital of $1.59 billion by the end of last year. And 107 received capital investment of over $10 million each.

"Via close cooperation with global auto giants, Guangzhou has built up rich human resources in manufacturing technology and management," said Zhang Fangyou, chairman of Guangzhou Automobile Group.

"The city has come to a stage for greater efforts in R&D as well as for the development of self-owned brand products strategically meaningful to the sustained development of the automobile industry."

According to Zhang, construction is underway as scheduled for the group's center for R&D work and production of self-owned brand products ranging from engines to transmissions and entire vehicles in the city's Panyu district.

Covering an area of 1.5 million sq m, the facility will require a total investment of 6.8 billion yuan, 3 billion yuan of which will be for R&D facilities and 3.8 billion yuan for production lines.

The site aims to produce 100,000 vehicles and 100,000 engines annually at the initial stage of the project, and 200,000 vehicles and 250,000 engines annually when fully operational.

Reliable sources say that Guangzhou plans to assemble 1.3 million vehicles by the year 2010 and realize a gross industrial output of 200 billion yuan from the assembled vehicle sector as well as 100 billion yuan from the component sector.

The city also aims to generate $1.8 billion worth of exported components and assembled vehicles by 2010.