China Auto News of the Week (November 24-30, 2007)
Russia spurns Chinese automakers, but can hardly extinguish their hopes
By Tony From:Gasgoo.com November 26 2007
Shanghai. November 26 (Gasgoo.com) – Starting November 10, Russian government will no longer accept foreign automakers' applications to build automobile assembly plants in Russia and all applications by Chinese automakers prior to this deadline had been declined, Chinese media 21st Century Economic Report said.
During an auto show in Guangzhou last week, Great Wall president Wang Fengying said that Russian government had agreed on Great Wall’s assembly plant in Russia, but Great Wall had not obtained any official approval.
Another Chinese automaker Geely spokesman Wang Ziliang said Geely will continue its operations in Russia but the company will have to reconsider its local production plan.
In contrast to unlucky Chinese automakers, 15 American, Japanese and European automakers have obtained approvals from Russian government, which means they could assembly automobiles by importing auto parts with low imports tariff.
However, Chinese automaker Brilliance Auto signed an agreement with IRITO Group on a KD assembly project on October 30. Under the agreement, Brilliance Auto will produce 100,000 Zhonghua Zunchi cars in a Russia assembly plant in the next five years.
Separately, Lifan auto has signed a 160 million auto parts supply contract with Russian company AutoMir. Under the contract Lifan will supply auto parts that could be used to assemble 30,000 cars in the next three years.
In another development, China's biggest auto exporter Chery has signed an agreement with a Russia company to start assembly plant in 2009. The assembly plant, with annual output 200,000-250,000 units, will allow Chery to sell 50,000 units in Russia market annually.
Jing Gebo, deputy general manager of Chery's sales division, said Russian government's recent announcement would not impact on Chery's projects that have already obtained approvals earlier from Russian government.
BMW 1 series to be introduced to China by mid-2008, CEO says
By Tony From:Gasgoo.com November 29 2007
Shanghai. November 29 (Gasgoo.com) - BMW one series will be introduced to Chinese market by the middle of next year, BMW China president Dr. Christoph Stark told a press conference today.
"BMW one series will come to China by means of importing," said Dr. Stark. "As to whether or not it would be locally produced in China and when, our decision will be based on market response."
BMW one series will be priced at about 250,000 yuan ($33,813) in Chinese market, Beijing News reported.
Earlier this week, BMW unveiled plans to add its new 6-Series to China portfolio and will sell the model at 1.07 million yuan ($144,670) in Chinese market.
In the first ten months of the year, Brilliance BMW sold 24,254 BMW vehicles, up 35 percent from last year; in the same period, imported BMW vehicles sold 14,329 units in Chinese market.
BYD plans to sell hybrid vehicles in U.S. market next year
From:Puregreencars.com November 29 2007
Shanghai. November 29 - BYD Auto Co. plans to start volume exports of its own-brand cars to U.S. and European markets in the second half of next year or early 2009, according to an Automotive News report.
The automaker says it will display plug-in hybrids and electric cars at the Detroit auto show in January. Both BYD and Chery have bold intentions to enter the United States. But the safety and emissions standards are stiff, and the automakers are small with inexperienced engineers and marketers.
BYD Auto, based in Shenzhen, has a history of brash predictions. For instance, BYD Auto has said it will be China’s biggest-selling automaker by 2015. But this year its sales will reach about 100,000, about one-half the production of one assembly plant in the United States.
The company sells gasoline-powered cars now but is targeting hybrids and battery-powered cars. Its parent company, BYD Co., is a leading rechargeable battery maker in the global market.
The company plans to produce a plug-in hybrid model in the second half of 2008 and bring purely electric-powered cars to market in 2009.
BYD Auto makes startling claims about its hybrids. The company says its first plug-in hybrid, the F6DM, will have a range of 267 miles (430 kilometers) on one tank of fuel, with a maximum speed of about 99 mph (160 kph). The car will be able to go 62 miles (100 kilometers) powered by batteries alone, the company says.
BYD Auto says that the battery pack can be recharged about 2,000 times, sufficient for seven to 10 years of operation. It needs nine hours for a full recharge by home power but only about 10 minutes for a 50 percent recharge with a special power station.
Xia says the F6DM may sell for about 200,000 yuan ($26,700).
The company hasn’t announced details about its planned electric cars. The company says its battery and hybrid cars are powered by a type of lithium-based battery called lithium iron phosphate.
A source at a company also working on batteries in China — and a competitor of BYD’s — said lithium iron phosphate batteries have various problems. They are heavy, costly and difficult to mass-produce with consistent quality.
China's auto exports jump to half a million; number of exporters drops 70%
By Ally From:Gasgoo.com November 28 2007
Shanghai. November 28 (Gasgoo.com) - China's vehicle exports will top 500,000 units by the end of this year and reach one million units in the next two years. On the other hand, the number of auto exporters has dropped dramatically, a senior government official said.
In the first ten months of this year, China exported a total of 469,000 vehicles, up 77.6% from a year earlier. The value of complete vehicle exports reached $5.5 billion, up 120.8 percent from the same period of last year. Meantime the number of auto exporters has been reduced to 348, down 70 percent compared to last year.
"The drop is attributed to a government regulation released by Ministry of Commerce and National Development and Research Commission last December, which aims to raise hurdles for exporters and force less competitive exporters out of the competition, "said Zhang Ji, an official from China's Ministry of Commerce.
Echoing Zhang's remarks, Fu Peizhao, a senior engineer with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products said that inadequate after-sale service and spare parts supply would damage the reputation of China automobile industry.
Nanjing Auto, Fiat may go to divorce next month, company source says
By Tony From:Gasgoo.com November 28 2007
Shanghai. November 28 (Gasgoo.com) – Fiat and Nanjing Auto Corporation will officially put an end to their relations next month, Chinese newspaper Beijing Youth Daily reported today.
"The two sides have reached a consensus that they will officially put an end to the joint venture next month and the agreement will be made public soon," a Fiat source told the newspaper.
However, Duan Jianjun, Chief Business Officer of Nanjing Fiat Auto Co said that the negotiations are still under way. "No matter what results may come out at last, Fiat is determined to expand its operations in Chinese market. In fact, we are in talks with other Chinese automakers too."
Another senior Fiat official, Jing Boqing, flatly denied that the divorce will happen. "We are struggle to save the joint venture," he said.
The joint venture, Nanjing Fiat, planned to bring three models to Chinese market: Bravo, Linea and Grand-Punto. However the importing plan has been frozen before it is implemented.
Fiat has been seeking to bolster its presence in Chinese market by imported more cars; however this plan was opposed by Nanjing Auto, saying that importing is not a profitable business.
In the first half this year, Najing Fiat sold 11,265 vehicles, down 30 percent from one year earlier. Its product portfolio includes Perla, Fiat Palio, Fiat Weekend and Fiat Siena. The joint venture had originally planned to sell 50,000 vehicles this year.
Najing Fiat was established in April 1999 by Nanjing Auto and Fiat. The total investment was 3 billion yuan, with each partner holding 50 percent stake.
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