China Auto News of the Week (December 22-28, 2007)
China to implement EU-III standards on new heavy trucks
By Joanne Jiu From:Gasgoo.com December 27 2007
Shanghai, December 27, Gsasgoo.com—China will implement EU-III standards on heavy trucks as of January 1, 2008, according to regulations jointly released by China’s State Environmental Protection Agency and General Administration of Quality Supervision, Inspection and Quarantine.
Under the new regulation, new heavy trucks are not allowed to sell at the Chinese market if they cannot meet EU-III emission standards.
China’s National III standard, which is very similar to EU III standard, requires a 30%-50% reduction of tailpipe emission from the EU-II standards.
"The mandatory EU-III standards will make raise heavy truck prices by 10%-15%,” said Guo Huanan, spokesman of Sinotruck, China's largest heavy truck manufacturer.
Most heavy truck vehicles currently in use are unable to meet this standard, said Ba Yingfeng, sales manager of Shanghai Huizhong Automotive Manufacturing Co.,Ltd. “To meet this standard, our production costs will go up RMB 20,000-30,000 for each vehicle.”
To meet the new standard, domestic manufactures have to upgrade the mechanical engines, which in currently use for most heavy truck makers, into the advanced electronic control engines. At the same time, gas stations should be upgrade to provide III-standard oil.
FAW, Dongfeng Motor and Sinotruck, the Big Three in China’s heavy truck industry, have launched a series of heavy truck models. Sinotruck's "Golden Prince” has satisfied EU-III standards. Shaanxi Heavy Truck, has developed EU-III standard WP10N and WP12N engines that are equipped in vehicles made by the automaker. Other truckers, Beiqi Foton and Chongqing Heavy Truck are seeking foreign partners to develop engines that can meet EU-III standards.
Industry experts laid out some barriers for the implementation of EU-III standards in China’s heavy truck market. First, few models produced by domestic truck makers can meet this standard; second, EU II-standard fuel, which is current in use in most gas stations, could damage the new engines. In addition, maintenances of III-standard heavy trucks are not available in most repair shops.
2008 Honda Accord sedans roll off assembly line in Guangzhou
By Tony From:Gasgoo.com December 27 2007
Shanghai. December 27 (Gasgoo.com) – The much expected 2008 Honda Accord sedans rolled off assembly line in the second plant of Guangzhou Honda today.
During the off-line ceremony, Fu Shoujie, deputy general manager of Guangzhou Honda said, “We’ve added some new features, like intelligent key system, backup radar detector and automatic sun certain control system to the 2008 Honda Accord.”
"More importantly, we’ve upgraded the interior decoration of the 2008 Accord produced to C segment sedans. And that’s the biggest difference from the 2008 Honda Accord sedans sold in North American market.”
Guangzhou Honda expects to sell 178,000 Accord sedans next year, while its closest competitor Toyota Camry expects to sell 175,000 vehicles next year.
Guangzhou Honda did not reveal the price of 2008 Honda Accord, but experts say it is unlikely to be cheaper than the recently launched Ford Mondeo Zhisheng, whose lowest price stands at RMB 181,800 (USD 24,788).
Currently, the price of 2007 Accord powered by a 2.0 liter engine has been lowered to 169,800 yuan ($22,581) and the 2007 Accord powered by a 2.4 liter engine has been lowered to 199,800 yuan ($26,570) in Chongqing.
Honda Accord has become a popular model in the middle and upper segment of China's sedan market. In the first 11 months this year, Honda Accord sold 111,121 units in Chinese market, second only to Toyota Camry, which sold 149,972 units.
Guangzhou Honda plans to sell 340,000 vehicles in 2008
By Tony From:Gasgoo.com December 27 2007
Shanghai. December 27 (Gasgoo.com) – Guangzhou Honda unveiled its sales plan for next year at a ceremony to mark the rolling off the assembly line of 2008 Honda Accord sedan in Guangzhou today.
Fu Shoujie, deputy general manager of Guangzhou Honda, announced at the ceremony that Guangzhou Honda plans to sell 340,000 vehicles in Chinese market in 2008; specifically, the company plans to sell 178,000 the 2008 Honda Accord vehicles, 42,000 Honda Oddyssey, 60,000 Honda City and 60,000 Honda Fit vehicles.
However, Chinese media reports said Guangzhou Honda planned to sell 185,000 vehicles in Chinese market in 2008.
In 2007, Guangzhou Honda sold 295,000 vehicles, about 15,000 units less than the 310,000 target made at the beginning of the year.
"We’ve made some adjustments with our production lines one month earlier than scheduled,” said Fu Shoujie. “And our production is affecting the adjustment. That’s why we failed to reach the target.”
Last week, Honda Motors announced it would increase its China sales by 17 percent to 490,000 units next year, a target that is 10,000 units more than the automaker's current capacity in China.
Currently, Honda has a total annual capacity of 480,000 units in China: Dongfeng Honda, where Honda CR-V and Honda Civic are made, has total capacity of 120,000 units and Guangzhou Honda, where Honda Accord, Fit are made, has a total capacity of 360,000 units.
In addition, Honda also have a 50,000 capacity to produce Honda Jazz in Guangzhou, but these vehicles are made for exports, therefore excluded in Honda's capacity in China.
Guangzhou Toyota plans to sell 210,000 vehicles in 2008
By Ally From:Gasgoo.com December 26 2007
Shanghai. December 26 (Gasgoo.com) – Guangzhou Toyota Motor Co, a joint venture between China's Guangzhou Automobile and Toyota, said yesterday that it plans to sell 210,000 vehicles in China next year, a target that may turn the joint venture one of the top ten automakers in the country.
Ge Yuanzhe, general manager of Guangzhou Toyota, unveiled the 210,000 sales target to reporters yesterday.
"Considering the current sales records, we are confident to reach a sales target of 170,000 units this year," said Feng Xingya, deputy general manager of the joint venture. With average monthly sales of 14,000 units, Camry has held its No.1 position in the upper and middle sedan segment for 12 consecutive months.
Specifically, Guangzhou Toyota expects to sell 175,000 Camry vehicles and 35,000 Yaris vehicles, a compact sedan which is to be produced in Guangzhou Toyota's second plant by mid-2008.
In November, Chinese authorities have approved Guanghou Toyota's plan to build a second plant in Guangzhou. The total capacity of Guangzhou Toyota, after the completion of the second plant, will reach half a million units annually.
Worldwide, Toyota said on Tuesday that it plans to unseat General Motors from No.1 automaker by selling 9.85 million vehicles worldwide next year, up 5 percent from this year.
China to offer incentives to hybrid electric vehicles
By Tony From:Gasgoo.com December 26 2007
Shanghai. December 26 (Gasgoo.com) China will offer preferential policies and other incentives to hybrid vehicles, according to a new energy policy guidelines prepared by National Development and Reform Commission (NDRC).
Under the Industry Restructuring Policy Guidelines released by NDRC, China will offer preferential policies to hybrid electric vehicles from production to consumption.
That means not only producers of hybrid electric vehicles will enjoy favorable policies in producing and selling these vehicles, consumers will also have more incentives to use these vehicles: the incentives will it cheaper to drive a hybrid vehicle compared with conventional engines.
High prices have been a barrier to the development of hybrid vehicles. Take Toyota Prius for example, this is the first hybrid vehicle introduced to Chinese market. It started locally production in Changchun-based FAW-Toyota at the end of 2005. But the sales of this hybrid vehicle are disappointingly small.
In the 11 month this year, the model sold only 405 units; while it sold 2,142 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.
This month Honda Civic hybrid will be imported to Chinese market and the hybrid vehicle will be priced at 269,800 Chinese yuan (36,000 U.S. dollars). According to experts, the hybrid vehicle boasts half the fuel consumption of a normal 1.8 liter petrol vehicle, over the same distance.
Last month, Mitsuru Ozaki, general manager of Dongfeng Honda asked Chinese government to offer incentives to hybrid vehicles.
"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.”
In a shift over new energy policy, China favors hybrids over diesel vehicles
By Tony From:Gasgoo.com December 25 2007
Shanghai. December 25 (Gasgoo.com) – Diesel engine powered sedans will no longer enjoy preferential policies offered by Chinese government, said an official from China’s National Development and Reform Commission (NDRC).
In the recently released Industry Structure Adjustment Guidelines 2007, a government policy agenda prepared by NDRC, clauses concerning the development of diesel engine sedans are deleted.
“With all things considered, we’ve decided to remove diesel engine powered sedans from the catalogue,” Yang Yongxin, an official from the Industry Policy Department of NDRC told China Business News.
Instead, the Guidelines said government will encourage the development of electricity combustion engine technology and related key parts.
Under the policy guidelines concerning new energy vehicles released by NDRC on December 14, China will continue to encourage the development of Compressed Natural Gas, Hydrogen fuels, blend fuels, hybrid powered vehicles and batter-powered electricity vehicles.
More interestingly, the guidelines raised bio-fuel technology and DME engine technology for the first time as government-backed automobile technology.
Industry insiders say that the shift in government policy means China is clearly in favor of hybrid vehicle technology developed by Honda and Toyota over the diesel engine technology advocated by Volkswagen and PSA.
”Diesel engine sedan is still in the testing stage, not in maturity yet,” said Li Shulin, an automobile expert with NDRC. “We’re not certain about the direction of diesel engine sedan. And we’re also concerned with the supply of diesel fuels.”
In fact, there have been pros and cons over the development of diesel engine sedan among Chinese experts. Many experts have expressed their support for this technology.
“If 30 percent of China’s all vehicles in use were powered by diesel engines, the country could save up to 28.30 million tons of oil a year,” said Feng Fei, director of the Economic Development Department of National Development Research Center, a government think-tank affiliated to China’s central government.
Detractors of diesel engine sedan said diesel engine vehicles can barely meet EU-IV tailpipe emission standards; it will be out of question that diesel engine technology can meet more stringent EU-V standards which will be released in the future.
Changan Ford Mazda may build second plant in Chongqing
By Ally From:Gasgoo.com December 24 2007
Shanghai. December 24 (Gasgoo.com) -Chang'an Ford Mazda Automobile Co, Ford's China joint venture, plans to open another plant in Chongqing, local authorities confirmed, according to a Beijing News report today.
The new plant will give the joint venture additional 100,000 units capacity. The new capacity, in combination with its current 410,000 units capacity a year, will boost the automaker's capacity in China up to more than half a million units, the newspaper said.
Though the company so far has not confirmed any details about the new facility, newspaper report said that the facility is unlikely to be finished by 2009.
Earlier Jeffrey Shen, president of the joint venture, said they are gauging the need for expanding capacity. "We are considering all options; a new plant project is one, but not necessarily the only choice," Shen said.
Currently the joint venture's line-up covers Ford Mondeo and S-Max, Mazda3 and Volvo S40, and it also plans to produce a subcompact based on the Verve concept before the end of next year. The Verve made its Asian premiere at a recent auto show in Guangzhou.
In the first eleven months of this year, Changan Ford Mazda sold 190,831 passenger vehicles in China, up 0.9 percent compared to the same period last year.
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