China auto news this week(2007..6.18-2007.06.23)

To China auto market, June and July, even August are dull seasons. But in June, several events are still eye catching. Fiat and NAC broke their cooperation ties eventually, and it's reported that Chery will manufacture Fiat's model Alfa Romeo, so Chery is likely to be Fiat's next partner in China. Another news said that it is estimated that China auto export will exceed 510,000 units this year, which means it will double that of 2006.

The following are top news this week.

China auto export to top 500,000 mark 
 
By Ally   From:www.gasgoo.com June 21 2007
 
According to Fu Peizhao, Vice secretary general of China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), China's vehicle export will reach 510,000 units and its export value will hit 5.6 billion dollars in year 2007.

China's auto exports hit a record high of 343,500 units in 2006, and export value were 3.1 million dollars, more than double of 2005's figure, according to the Ministry of Commerce (MOC). Exports in the first quarter of 2007 were up again, by nearly 100% compared with the same period in 2006. Exports and exports value were 141,800 units and 1.6 billion dollars respectively, up 41% and 51% y-o-y. If this trend continues, China is well on its way to reach 510,000 vehicle exports in 2007, said Fu.

China's auto exports concentrate mainly on commercial vehicles, which accounts for 65% of the total vehicle export, and 72% of the total export value. Sedan exports take up 35% percent currently, but the latest statistics show that exports of sedans has increased significantly in the first half of 2007.

China is eyeing exports to European countries in the near future as it has already expanded its exports to Asia, the Middle East and Africa. 




Global Tire giants focusing on China 
 
By Ally   From:www.gasgoo.com June 20 2007

Michelin Corporation has announced recently to boost production capacity of its Shanghai joint venture and open another tire factory at Southern China. The firm has also signed a memorandum with the provincial government of Liaoning in northeast China covering new truck tyre and sedan tyre projects, the official Xinhua news agency reported this March.

China's mid and high-end replacement tire market is mainly shared by early birds like Michelin, Bridgestone, which has four tire plants in the country, and Goodyear, which has a site in Dalian and was the first global tire firm to set up a plant in China.

Currently more and more global tire manufacturers are eager to cash in on China's growing vehicle population. Companies, like Italy's Pirelli and German peer Continental, said they will mainly focus on the medium and high-end market in China to compete with Michelin and Bridgestone.

Insiders predict that the entire Chinese tire market is set to rise at a rate between 20 and 25 percent a year. According to the reports, more than 50% of the tire market in China is occupied by foreign enterprise whose profit margin goes as high as 20%.




Fiat to break joint venture ties with Nanjing
 
By Jorvan   From:www.gasgoo.com June 20 2007

The Fiat group CEO Sergio Marchionne has issued a formal announcement saying that Fiat Group will no longer put new models into production at Nanjing Fiat, a joint venture established between Fiat and NAC (Nanjing Automobile Corporation). Fiat will withdraw completely from the management team, and NAC will become Fiat's Chinese OEM counterpart,

Early June this year, Fiat CEO Sergio Marchionne visited China to hold further discussions on the Nanjing Fiat development plan. Fiat appears certain to break off its joint venture ties with Nanjing Fiat if the Chinese company fails to fulfil its promised investment in the project. The Italian giant will proceed to seek another joint venture partner in China.

Earlier, Fiat group planned to invest 500 million euros in the next five years, targeting to produce 300,000 units in 2010.

Fiat has set up a global procurement center in Shanghai soon after Marchionne's announcement. According to the plan, Fiat's sourcing in China will reach 1.5 billion euros by the year 2010.




Chery to build Alfas in China
 
By Ally   From:www.gasgoo.com June 19 2007

It is reported that the negotiations between Italian auto giant Fiat and Chinese automaker Chery have come to fruition recently, and the two parts will form a new venture in China to assemble Alfa Romeos. What is not yet clear is the role that Nanjing Auto might play in such a partnership.

Right now the only deal between Fiat and Chery is an engine partnership. In late 2006 that partnership was expanded so that Fiat could buy up to 100,000 Acteco gasoline engines from Chery annually. Fiat said the to-be-sold Linea model will be equipped with the engines.

Nanjing recently began assembling the MG TF roadster and has signed a letter of intent with the owners of the Austin-Healey brand to revive that storied British marque. Fiat has complained in earlier reports that its Nanjing joint venture put less and less focus on Fiar brand promotion in China. Looking for deeper cooperation with Chery would fit in nicely with Fiat's target of selling 300,000 units in China after some uneasy cooperation with Nanjing Auto.

Nanjing Fiat Automobile Co Ltd has reported that cumulative sales of its small-sized Perla, Siena, Palio and Weekend sedans in China totaled 31,300 units last year, and sales for the first for months this year were 7,529, down 36.4% y-o-y.




Profit at Major automakers totaled RMB18.1bn Jan- April
 
By Ally   From:www.gasgoo.com June 22 2007

Profit growth of China’s major auto enterprises has flattened in the fourth month compared to the first quarter. Total profit in the fourth month is 18.1 billion Yuan, up 51.32% y-o-y, but is 18.58% lower than that of the first quarter. The accumulated pre-tax reached 39.45 billion Yuan, up 3.44% y-o-y but was down 5.04% compared to the first quarter.  Taxes of major business climbed by 36.08% to 9.96 billion Yuan and the value-added tax went up to 11.38% from 10.76%.

Profit almost doubled at Chery Automobile, National Heavy Duty Truck Group Corp (CNHTC) and Qingling Motor in the first four months, with a growth of 221.81%, 215.06% and 152.94%, respectively. Compared to the first three months, Qingling's growth in the fourth month surged by 112.72% while Chery and CNHTC saw a decline of 188.87% and 330.08% respectively.

Guangzhou Automobile Group, Shanghai Automotive Industry Corp. (SAIC Group), Nanjing Automobile Corp and Beijing Automotive Industry Holding Company (BAIC) saw profit increased by 71.07%, 57.13%, 53.63% and 49.57% respectively. BAIC and Nanjing Auto continue to advance, while Guangzhou Auto and SAIC saw a loss of 16.46 and 14.81 percent respectively.