Changan Auto pushes forward with high-end passenger vehicles

Changan Automobile Group plans to invest 4.33 billion yuan ($652.16 million) to build a vehicle-production base in Beijing, aiming to strengthen its market position in North China, particularly in the high- and medium-end passenger vehicle segments and new energy vehicles.

The production base - to be located in a large industrial park southwest of Beijing in Fangshan District - is expected to start operations in June 2012, the company's listed arm, Chongqing Changan Automobile said in a filing to the Shenzhen Stock Exchange Tuesday.

"The base will produce high- and medium-end passenger vehicles such as sedans and compact SUVs and new energy vehicles including hybrids and full-electric vehicles," Liang Dong, a Changan public relations official, told the Global Times.

All vehicles that roll out of the production facility will fall under new brands in a bid to differentiate them from Changan's current low- and medium-priced compact models like the Benben and Yuexiang, Liang said. Sichuan Province-based Changan said earlier this year its first premium model will roll off the production line next year.

Liang said the new venture will help boost Changan's footing in North China, raising the automaker's total vehicle production bases in North China to three, and another eight scattered across southern and eastern provinces.

Changan assembles passenger vehicles for Ford Motor and Mazda Motor. It also has a compact-vehicle joint venture with Suzuki Motor. The automaker inked a joint venture with PSA Peugeot Citroen in early July to produce environmentally-friendly light commercial vehicles and passenger cars in the southern city of Shenzhen.

An additional 7 billion yuan ($1.05 billion) is slated to be invested in the Beijing venture according to Changan, which vowed to produce 500,000 vehicles and 500,000 engines a year at the base.

Changan did not mention in the filing how it would fund the project, but it said in an announcement earlier this month it received regulatory approval to raise 4 billion yuan via a public share offering to update its small vehicle technologies and improve its in-house research and development.

The automaker kicked off sales of its hybrid vehicle the Jiexun last June. However, like other new-energy vehicles, market acceptance was moot. Changan's first full electric vehicle - the Changan Benben Mini, will reportedly be available early next year. Changan aims to produce 6 million cars in 2020, 30 percent of which will be new-energy vehicles.

Anhui-based Chery Automobile began to sell its first fully-electric vehicle, the Riich M1-EV earlier this month.

Anhui Jianghuai Automobile Corp, announced in August plans to produce 1 million new-energy vehicles via a partnership with US-based Hybrid Kinetic Group.