Bird's auto dreams dashed as Changfeng JV ends

Shanghai, February 24 (Gasgoo.com) The auto-making dreams of cell-phone maker Ningbo Bird Technology Co., Ltd. are shattered as its joint venture with Changfeng Motor comes to an end, China Business News reported today. The two companies are liquidating the assets of their car venture Changfeng Technology Co.

In October 2006, Changfeng and Bird formed a 50:50 joint venture Changfeng Technology Company, headquartered in Changfeng Motor's home base Changsha city of Hunan province, with its manufacturing base in Yongzhou of Hunan. The venture unveiled a compact MPV concept Qiling at the 2007 Shanghai auto show and launched the model to market in March 2008. But the car didn't sell well due to some defects and the market downturn.

Meanwhile, Changfeng, Bird and a Hongkong company jointly set up an engine plant -- Changfeng Motors Technology Co., Ltd.-- in December 2007, as part of Bird's long-range plan to enter the auto-making industry. The facility makes 1.6L, 1.8L and 2.0L engines of the CF series, with an annual output of 150,000 units. The engines rolled off line on January 16, 2009.

Bird aimed to shift its investment focus from cell-phone making to the car industry. This is different from crossover strategy of BYD, which has blazed a new trail into the auto sector after gaining success in the business of mobile phone components and batteries. With its car venture assets being liquidated, Bird's car-making ambitions are dashed.

Industry experts said that it is only a matter of time that Changfeng and Bird would divorce sooner or later, as they married at the booming period of the auto industry when Bird was seeking new profit-growth areas and Changfeng urgently needed financial support for its own-brand development.

Now after the market downturn, China's auto sector is entering a "survival of the fittest" period, Changfeng Motor sees its own-brand models as top priorities, and Bird's financial strengths have become history. Therefore, the foundations of the Changfeng-Bird tie-up have come loose.

However, Bird will continue to hold its share in the auto engine projects of the Changfeng Motors Technology Co. and will support its engine research and development center in Shanghai.