China Auto News of the Week (November 19-23)

China's mini-cars see continuing decline in sales

By Joanne Jiu   From:Gasgoo.com November 19 2007

Shanghai, November 16, (Gasgoo.com)-Chinese local mini-car automakers witnessed a sharp and continuing decline in sales this year, official media Shanghai Securities News reported.
 
Sales of minicars in China's total auto sales have decreased to 14.3% in October, down from 19.4% in January, according to a Morgan Stanley report. As the mini-sized vehicle market has long been dominated by China's local automakers, like Chery and Geely. These automakers were plagued by a sluggish mini-car market this year.
 
QQ, a once hot-selling mini-car model produced by Chery, has experienced sharp sales decline this year. It sales slipped to 10,223 units in October down from 13,713 units early this year. Geely, another Chinese automaker who heavily rely on minicar sales sold 17,487 vehicles, 32.3% down from January sales.
 
Industrial analysts say that soaring oil price combined with fierce market competition has led to the slump of Chinese minicar market. Potential buyers would defer or even drop their purchase plan as oil price skyrocketed. On the other hand, most mid-range cars started to attract customers from potential mini-car buyers. 
 
"Higher emission standards is another factor leading to decline in mini-car sales," Jia Xinguang, a senior industry analyst said. He explained that Beijing has already put Euro III emission standard in place, and this policy will soon be followed by other cities.
 
Another factor is that the lack of strong governmental incentives for the minicar consumption, said Zhan Xialai, mayor of Wuhu City in Anhui Province.
 

Government OKs Toyota's second plant in Guangzhou

By Tony   From:Gasgoo.com November 22 2007

Shanghai. November 22 (Gasgoo.com) – The National Development and Reform Commission, China's top economic planning and regulatory body, has recently approved Toyota's second plant project in Guangzhou, Chinese newspaper Beijing News reported today.
 
"Guangzhou Toyota has a regular capacity of 200,000 vehicles per annum, and we can raise that capacity to 240,000 units by adding more shifts, but that's the ceiling capacity for us," said Ge Yuanzhe, general manager of Guangzhou Toyota.
 
Toyota's hot-selling compact sedan Yaris, which is being displayed at Guangzhou Auto Show, will also be locally produced in Guangzhou plant by the middle of next year.
 
To increase the output of its popular model Toyota Camry and accommodate the newly-introduced Yaris, Guangzhou Honda has to open a second plant.  "We are planning to open the second plant as our output capacity can no longer meet market demands," Ge said.
 
The second plant will start production in the third quarter next year. Guangzhou Toyota will have a total capacity of half a million per annum after the completion of its second plant in Guangzhou, according to Chinese media report.
 
Guangzhou Toyota was established in September 2004, with an initial output capacity of 200,000 vehicles per annum.
 
Separately, Toyota Motor China president Isogai Masashi said at the 5th International Automobile Exhibition in Guangzhou that the company aimed to sell 700,000 vehicles in China next year, up 46 percent from this year. The company also vowed to grab 10 percent of Chinese auto market by 2010.
 
Guangzhou Toyota sold 136,910 Camry vehicles in the first ten months, which represents a stunning increase of 316.4 percent from one year earlier.

Toyota China raises sales target to 700,000 in 2008

By Ally   From:Gasgoo.com November 21 2007

Shanghai. November 21 (Gasgoo.com) - Toyota Motor Corp said it aimed to sell 700,000 vehicles in China next year, up 46 percent from this year, a senior Toyota official said, reported by China Securities Journal.
 
Isogai Masashi, president of Toyota Motor (China) Investment Co, made the above announcement at the 5th China (Guangzhou) International Automobile Exhibition yesterday. This target made Toyota a more formidable challenger to Volkswagen and General Motors, which plan to sell 900,000 and one million vehicles respectively in the Chinese market this year.
 
Toyota, which competes with Honda Motor Co and other global carmakers in China, sold about 380,000 vehicles in China in the first 10 months of this year, up 67 percent from a year earlier. The company's sales for the full year are now projected to be about 480,000 units, up 11.63 percent from earlier target of 430,000 units, the company said.
 
"The brisk sales were mainly attributed to the popularity of Toyota Camry, which sold 200,000 vehicles since it started production in May 2006," said Hu Su, deputy-general manager of Guangzhou Toyota.
 
In the first ten month this year, FAW-Toyota sold 209,589 vehicles in Chinese market, up 14.4 percent from one year earlier and its most best selling model, Corolla has sold 84,101 units, up 25 percent from one year earlier.
 
By contrast, Guangzhou Toyota sold 136,910 Camry vehicles in the first ten months, which represents a stunning increase of 316.4 percent from one year earlier.
 
"Toyota's hot-selling compact sedan Yaris, which is being displayed at Guangzhou Auto Show, will also be locally produced in Guangzhou plant by the middle of next year, and we hope its sales will catch up with that of Camry in the foreseeable future" said Hu.
 
Guangzhou Toyota is also planning to build the second plant in Guangzhou when its output capacity can no longer meet market demands. Currently Guangzhou Toyota has a full capacity of 240,000 vehicles per annum.

Honda executive asks China to offer incentives for hybrid vehicles

By Tony   From:Gasgoo.com November 21 2007

Shanghai. November 21 (Gasgoo.com) - Mitsuru Ozaki, general manager of Dongfeng Honda asked Chinese government to offer incentives to hybrid vehicles, Hongzhou-based Chinese newspaper Today Morning Express reported yesterday.
 
This month Dongfeng Honda will be imported Japanese-made Honda Civic hybrid vehicles to Chinese market. The report said the vehicle will be priced at 269,800 Chinese yuan (36,000 U.S. dollars).
 
"To make vehicle affordable to Chinese consumers, it is not enough to relay solely on reducing production cost,” Ozaki said. “It is our hope that Chinese government can hear our wishes, namely, China should come up with more incentives for hybrid vehicles.”
 
Europe and North America already have such preferential polices for hybrid vehicles in place; clearly China is left far behind in this area, Ozaki said.
 
"In the reminder of this year (one month and ten days), our target is to sell 200 Civic hybrid vehicles. However, the sales target for the next year will depend on market response," said Ozaki. “We do not expect the model to become a hot-selling vehicle very soon."
 
The vehicle, which is equipped with a 1.3 Liter engine, can compete with 1.8 Liter vehicle in terms of output, Ozaki said. It consumes only 4.7 Liter oil to cover 100 kilometers.
 
Experts said the hybrid vehicle boasts half the fuel consumption of a normal 1.8 liter petrol vehicle to cover the same distance.
The first Hybrid vehicle that entered Chinese market is Toyota Prius, which started production in Changchun-based FAW-Toyota at the end of 2005. But the sales of this hybrid vehicle are disappointingly small.

In October this year, Toyota Prius sold only 16 units in China; while the vehicle sold 81 units in the same month last year; in the ten month this year, the model sold only 299 units; while it sold 2,116 units in the same period last year.
 
Experts say disappointing sales of Toyota Prius is because of its prices (about $38,000). It is too expensive and China has not yet offered substantial policy incentives to its manufacturers and customers.