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China Auto News of the Week (January 28 - February 2, 2008)
Infiniti to introduce 3 new models to Chinese market
By Ally From:Gasgoo.com February 01 2008
Shanghai. February 1 (Gasgoo.com) - Nissan Infiniti plans to introduce three more models into China this year, including Infiniti M35, EX35 and G37, auto website cheshi.com reported today.
A company source said 1,500 Infiniti vehicles were sold out since Infiniti G35 and FX SUV were launched in Chinese market last July. Infiniti, however, is left far behind its rival Lexus, which has sold approximately 26,000 units last year.
Infiniti M35, an M series sedan showed at the Guangzhou Motor Show last year, was launched in Chinese market last December. It is priced between 548,000 yuan ($76,201) and 593,000 yuan ($82,460) in Chinese market.
Infiniti plans to display a small SUV EX35 in the 2008 Beijing Auto Show and launch the model soon after the show. Meanwhile, Infiniti G37, a luxury race car, will be launched in the second half of this year.
Infiniti hopes to gain a foothold in China's luxury car market through the launch of new models and gradually catch up with its rivals such as BMW, Lexus and Mercedes-Benz.
China promulgates new regulations on car-leasing
By Joanne Jiu From:Gasgoo.com January 31 2008
Shanghai, January 31, (Gasgoo.com)--China Banking Regulatory Commission released new regulations on auto financing companies yesterday, the Commission announced on its official web.
Under the new regulations, auto financing companies could provide leasing service to Chinese car consumers. The service, which is widely accepted in America and Europe, will encourage automobile consumption.
According to these regulations, individual consumer or fleet leasers like a company can lease a car on loans or choose to purchase the vehicle when the lease is up.
Before the leasing service is available, only individual buyers or auto dealers are eligible to apply for auto loans from a bank or auto financing company.
Statistics show that auto leasing account for about 30% of the fleet sale in the US; worldwide, 70 percent car purchases are made via auto financing, of which 60 percent are in the form of leasing. By contrast, only 2 percent to 3 percent of the buyers in China buy cars on credit or loans.
PSA, Hafei tie-up talks end up in failure
By Tony From:Gasgoo.comJanuary 30 2008
Shanghai. January 30 (Gasgoo.com) – French automaker PSA and Chinese automaker Hafei Group’s cooperation negotiation has ended up in a failure, Chinese media 21st Century Business New reported today.
Major opposition for the possible tie-up between PSA and Hafei comes from PSA’s Chinese partnership Dongfeng Group, which is also seeking a partnership with Hafei Group, the report said.
Dongfeng Group believes instead of seeking another partnership, PSA should focus exclusively on its current joint venture with Dongfeng Group. “PSA should do a better job at Dongfeng PSA before it moves to take on another partnership,” a Dongfeng Group official said.
"It is possible that our partnership project with Hafei Group may be scrapped,” said Wang Lenian, spokesperson of PSA China. “After all, our success in China hinges on its cooperation with Dongfeng Group.
Last year, Dongfeng PSA sold 207,255 vehicles in Chinese market, up 3 percent from one year earlier. Not only is this growth rate much lower than a projected growth rate of 30 percent, but also much lower than the industry’s average growth rate of 22 percent.
PSA Peugeot Citroen and Hafei Group signed a memorandum of understanding in July that the two parties will create a 50-50 joint venture to manufacture and sell vans with ten seats or less in Shenzhen.
Denis Duchesne, CEO of the French carmaker's China operations, said the vans would be made under the Peugeot, Citroen and Hafei badges with an initial capacity of 100,000 units a year. Currently Hafei's production base in Shenzhen already has a production capacity of 100,000 units. The tie-up with Hafei is part of PSA Peugeot Citroen's latest efforts to boost its China sales to 600,000 vehicles in 2010 from 200,000 units last year, Duchesne said.
The French carmaker currently assembles cars in the central city of Wuhan with Dongfeng Motor Corp, China's No. 3 auto group. However, it is still lagging behind its rivals in terms of China sales. General Motors, Volkswagen, Toyota and Honda all run two vehicle ventures in the country with local partners.
Heavy snowstorm disrupts China's automobile production
By Ally From:Gasgoo.comJanuary 29 2008
Shanghai. January 29 (Gasgoo) – A heavy snowstorm has forced two automobile production plants in central China's Wuhan to suspend production for a whole day, local newspaper reported today.
Dongfeng Honda Automobile Co and Dongfeng Peugeot Citroen Automobile Co both were forced to shut down as auto parts supply was shut off by an unprecedented snowstorm which has crippled highway traffic in most part of China's southern areas.
To meet this challenge, Dongfeng Honda has resorted to its spare parts inventory and chartered airplanes to deliver much-needed small parts. Dongfeng Honda is under a lot of pressure to deliver its hot-selling CR-V sports utility vehicles to customers who have paid down payment.
Dongfeng Peugeot Citroen is PSA's only joint venture in China, which is capable of producing 20,000 units annually; Dongfeng Honda currently has a capacity of 120,000 units annually.
In Chinese market, big-sized car sales soar, but small-sized plummet
By Tony From:Gasgoo.comJanuary 29 2008
Shanghai. January 29 (Gasgoo.com) – China sold a total number of 4.72 million sedan vehicles in domestic market last year, an increase of 23.46 percent from one year earlier, according to China Association of Automobile Manufacturers.
However official statistics show big-sized vehicle sales soared while small-sized vehicles plummeted in Chinese market. The table below shows year-on-year changes of the car sales in each displacement segment.
|
Engine displacement
|
2007 sales
|
year-on-year change
|
|
3.0 liter < displacement < 4.0 liter
|
12,100
|
450% (sales)
|
|
2.0 liter < displacement < 2.5 liter
|
516,600
|
26.56% (sales)
|
|
1.6 liter < displacement < 2.0 liter
|
1,445,500
|
45.67% (sales)
|
|
Displacement < 1.3 liter
|
730,200
|
-3.70% (market share)
|
|
Displacement < 1.0 liter
|
251,700
|
-30.9% (sales)
|
Source: China Association of Automobile Manufacturers.
Lifan expects A share IPO later this year; AIG buys a 25% stake
By Joanne Jiu From:Gasgoo.com January 28 2008
Shanghai, January 28, (Gasgoo.com)--The US-based insurer American International Group (AIG) has bought a 25-percent stake in Chongqing Lifan Industry (Group) Co. a Chinese local automaker, which is scheduled to make initial public offering in the second half of this year, China Venture News reported today.
Besides AIG, a global investment company ranked 23rd in Fortune-500-listing, Lifan also sold a minority stake to a Shanghai-based investment company.
"Lifan has changed from a wholly owned private company to an incorporate company, and we're planning an integral listing for all assets under the group," said Hu Qi, general manager of Lifan Auto Sales Co.
Lifan eyes to raise more than 1 billion yuan ($133 million) from the IPO, said Yin Mingshan, Chairman of Lifan, at an industry conference late last year in Shanghai. He added that the company would raise additional 4.5 billion yuan ($600 million) later for further expansion.
Yin, who remains the largest shareholder in the group, hoped Lifan's annual production capacity will rise to 400,000 to 500,000 vehicles by 2015, which will be almost tenfold the current capacity.
Lifan aims to produce 60,000 cars this year, up 50 percent from the previous year. Its second plant in Chongqing will be put into operation this year. And its overseas production is forecasted to grow to 25,000 units by 2010.
In a global sales war between GM and Toyota, China offers a decisive battlefield
By Tony From:Gasgoo.com
Shanghai. January 29 (Gasgoo.com) – Last week, General Motors and Toyota announced their global sales of 2007. GM reported global sales of 9,369,524 Wednesday; later in the day Toyota Motor Corp. told the Associated Press in Tokyo that its total was 9.366 million -- about 3,000 fewer than GM's.
However, Automotive News, the Detroit-based industry trade publication, disputed GM's final tally, on the ground that GM’s total includes sales of Wuling vehicles in China made by SAIC-GM-Wuling, of which GM holds only 34 percent stake. Subtracting Wuling, the sale report came up with a total of 8,885,599 for GM.
GM attributes its sales growth to emerging markets like, China, India, Russia and Brazil.
The automaker announced sold 1.03 million vehicles in Chinese market last year, an increase of 18.5 percent from one year earlier.
By contrast, though Toyota sold less than half a million vehicles in Chinese market, it posted a phenomenal 60 percent year-on-year growth. That means if the two auto makers carry the same momentum into 2008, their sales in China will change the balance next year.
GM has two major joint ventures in China: Shanghai GM (GM holds 50 percent stake) and SAIC-GM-Wuling (GM holds 34 percent stake). But GM has been seeking to increase its stake in the three-way joint venture and negotiations have been on and off for some years. If GM increases its stakes successfully, it will have more legitimacy to add the Wuling brand cars into its global sales.
Last year, Shanghai GM reported 479,427 vehicle sales in Chinese market and SAIC-GM-Wuling reported 548,945 vehicle sales, in Chinese market, up 20 percent from one year earlier. The leading manufacturer of mini-vehicles plans to sell 620,000 mini-vehicles in 2008, senior company official has said.
The three-way automaker has taken 43 percent of China's mini-vehicle market by 2007, while it held only 37 percent of the market one year earlier, Shen Yang, general manager of SAIC-GM-Wuling told a dealership conference.
SAIC-GM-Wuling builds and sells both commercial vehicles and passenger vehicles, including Wuling brand minivans, Wuling brand mini-trucks and the Chevrolet Spark mini-car.
SAIC-GM-Wuling was founded in June 2002 by GM China, Shanghai Automotive Industry Corp. Group (SAIC) and Liuzhou Wuling Automotive Co., Ltd. (Wuling Automotive). SAIC has a 50.1 percent stake, GM China a 34 percent stake and Wuling Automotive a 15.9 percent stake. SAIC-GM-Wuling is based in Liuzhou, Guangxi Zhuang Autonomous
Toyota also has two joint ventures operating in China. FAW-Toyota sold 282,615 vehicles and Guangzhou Toyota sold 170,294 vehicles last year.
To increase the output of its popular model Toyota Camry and accommodate the newly-introduced Yaris, Guangzhou Toyota plans to open a second plant. And the second plant project was approved by Chinese authorities last November.
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. The second plant will start production in the third quarter next year.
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.
80% Chinese buyers unwilling to buy small displacement cars, survey finds
By Ally From:Gasgoo.com January 28 2008
Shanghai. January 28 (Gasgoo.com) - A recent survey conducted by Sinotrust found that more than 80% of Chinese car buyers choose to buy vehicles with engine displacement between 1.3L and 2.0L; only less than 20 percent opt for vehicles with displacement of 1.3L or smaller.
Sinotrust, a supplier of marketing solutions and credit solutions in China, surveyed 15,000 car consumers on small displacement vehicles.
"The small displacement vehicles are usually poor in driving experience, comfort, and safety compared to larger vehicles. Therefore I would rather spend more money on a larger vehicle, such as Polo, Fit or Peugeot 206," a car owner told Sinotrust.
Most small-displacement cars, including Chery QQ, FAW Xiali and Changan Benben, cannot meet Euro III emission standard yet and will be banned in major cities like Beijing and Shanghai.
Last year China's low-small segment vehicles sold 765,977 units, down 7.2 percent year on year, mainly due to the sluggish sales of key models, like Chery QQ(11,019 units, down 34.1 pct) and ChangAn Benben(1,973 units, down 43 pct).
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