SAIC-GM-Wuling enlarges production capacity

Chinese automakers are unanimously enlarging their production capacity, making full use of the opportunity brought by the rapid growth of the mini car market in the first half of 2009.

On July 23, 2009, bellwether SAIC-GM-Wuling Automobile Co., Ltd. (SGMW), the joint venture among SAIC Motor Corporation Limited, Liuzhou Wuling Motors Co., Ltd., and GM China, started the rebuilding of its east Liuzhou plant and the second phase of its engine plant in the city, according to auto.163.com, a portal under NetEase.com Inc.

When the mini car market surged by 40% in the firs six months, SGMW outpaced other Chinese automakers with sales of more than 520,000 vehicles. In May alone, the company sold 100,258 vehicles, representing the sales of some counterparts in one year.

SGMW planned to sell 700,000 vehicles in 2009 at the beginning of the year. Based on the company's wonderful performance in the period from January to June, it decides to boost its sales target to at least 800,000, disclosed Wu Pengnian, its deputy general manager.

Actually, since its foundation in 2002, SGMW has seen its sales swell from 150,000 to 650,000 vehicles of 2008, and sales revenues bulge from CNY 377 million to CNY 2.148 billion. In recent years, the company took the first place in the domestic mini car field with a market share approaching 50%.

Meanwhile, its archrival Chongqing Chang'an Automobile Co., Ltd. is also busy expanding production capacity, posing great pressure on SGMW.

Currently, SGMW has three complete car plants situated in Qingdao of Shandong Province and west and east Liuzhou of Guangxi Autonomous Region, whose production capacity respectively hit 300,000 vehicles, 400,000 vehicles, and 200,000 vehicles. Besides, they are able to produce 700,000 engines per year.

The rebuilding of the east Liuzhou plant and the second phase of the engine plant needs a total investment of CNY 2.1 billion. The east plant will be able to produce 300,000 sedans and commercial vehicles upon the completion and the second phase 525,000 engines, boosting SGMW's production capacity to 1 million complete vehicles and 875,000 engines by 2010.

A top SGMW executive does not deny the story that the company would launch medium-grade cars. Currently, SGMW's passenger cars are mostly A00-class and its brand Spark has become popular with drivers.

Higher-grade passenger cars will be developed by absorbing advanced technology of General Motors Corporation and catering to the special demand of Chinese buyers.

SGMW is an indispensable beachhead of General Motors in the lucrative Chinese market, particularly, when the auto giant is undergoing bankruptcy reorganization.

Kevin E Wale, president and general manager of GM China, says that General Motors is very satisfied with its cooperation with Chinese partners and will continue supporting SGMW's development in the future.