China Auto News of the Week (May 26 - May 30, 2008)

Thammer to be new Head of Audi Sales Division in China

Shanghai, May 26 (Gasgoo.com) Johannes Thammer will become the new Managing Director of the Audi Sales Division in China as of June 1, 2008, according to Audi's press release.

The current Head of After Sales and Genuine Parts for Audi will replace Werner Eichhorn, who has been appointed by Volkswagen (VW) as the new head of sales for Germany for Volkswagen Passenger Cars. Bernd Hoffmann, currently Head of Sales Development at AUDI AG, will take over the position vacated by Thammer.

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Volvo likely to sue Foton Lovol for similar naming

Shanghai, May 26 (Gasgoo.com) Volvo Trademark Holding AB, a subsidiary of Swedish truck-maker Volvo Cars, recently said that its lawyers are collecting evidence worldwide of the name similarity of Foton Lovol Heavy Industries Co., LTD., while Foton Lovol is also preparing for the lawsuit. The key focus of the case is currently on the trademark issue.

Foton Lovol Heavy Industry Co., Ltd is a Chinese manufacturer of construction machinery, agricultural equipment and vehicles with 4 billion yuan ($574 million) total assets. In 2007, Foton Lovol sales revenue reached 9.5 billion yuan. Its agricultural harvesters now have 70% domestic market share. Meanwhile, 13,000 units of Lovol products have been exported to more than 90 countries across the world, generating total revenue of $100 million. As part of its global expansion strategy, Foton Lovol aims to boost its exports to 40% of its output by 2010.

Two VW JVs in China to increase joint local sourcing

Shanghai, May 26 (Gasgoo.com) Volkswagen (VW) hopes to maintain its competitiveness in the Chinese market by enlarging joint sourcing. VW said recently that its two joint ventures (JV) in China would increase shared components purchase to 75%.

It is estimated that about 80% of the components will be sourced in China for the two models: Lavida, produced at Shanghai Volkswagen Automotive Co., and the New Bora, produced at FAW-VW. This just happens in the context of Toyota, GM, and Ford reducing auto parts quota in China

VW aims to increase to 75% of its two JVs' common sourcing , while at present only 20% are jointly sourced by the two arms of VW in the south and north China, said Stefan Krauss, senior manager of the technical development division at Volkswagen Group China.

Beijing Hyundai to make Hyundai i30 in late 2008

Shanghai, May 27 (Gasgoo.com) To reach this year's production and sales targets, Beijing Hyundai will make another new model of Hyundai in addition to the heavyweight model Elantra in the second half of 2008. Sources said that the Hyundai i30 hatchback for the European market will be made in the second plant of the joint venture later this year.

The Hyundai i30 is a hatchback model with a 2650 wheelbase and shares most parts with Kia Cee'd. It is powered by six engines for choice, including the gasoline versions (1.4L 109hp, 1.6L 122hp, 2.0L 143hp) and the diesel versions (1.6L 90hp, 1,6L 115hp, 2.0L 140hp). In safety, all models have driver, passenger and curtain airbags, traction and stability control and finally ABS with EBD. The car is well equipped with even the basic Comfort trim boasting alloys, CD player and air conditioning.

Brilliance BMW to budget 1 mln yuan for second plant 

Shanghai, May 27 (Gasgoo.com) BMW and its Chinese partner Brilliance will pour around 1 million yuan ($143,600) to the construction of their second China plant, a project which will start later this year.

The new plant is expected to boost the joint venture’s annual capacity to 100,000 units from the current 30,000 units. "As this second plant is primarily for high-end models, we will probably invest some 1 million yuan in the project," an unnamed Brilliance executive said.

ArvinMeritor buys 150 tons of auto steel from Ma Steel

Shanghai, May 28 (Gasgoo.com) The Brazil unit of U.S. auto-parts giant ArvinMeritor has recently signed a contract with China's Ma'anshan Iron & Steel Group (Ma Steel) for sourcing 150 tons of steel for making auto wheels. And Ma Steel may join hands with a Chinese auto-parts maker in developing steel wheels for global markets.

Auto wheel steel is the crucial auto-part material for car-making and has great market demands. Since the launch of its new plant, Ma Steel has been developing and producing steel for automobile wheels as one of the company's priority projects. The high-quality steel made by Ma Steel meets the national standards in precision, fatigue-resistance and soldering properties. As its new steel was launched in April this year, Ma Steel received an order from Zhejiang Jingu Automobile Components Manufacturing Co., Ltd., China's leading maker of steel wheels, for 600 tons of auto wheel steel. And now Zhejiang Jingu has ordered another 5,000 tons of this new steel.

Chrysler to export Chery A1 to Mexico in late 2008

Shanghai, May 29 (Gasgoo.com) Chery Auto will finally consummate its corporate marriage with Chrysler when a version of the Chrysler-badged Chery A1 goes on sale in Mexico by the end of 2008. The Chinese small-car is built as an OEM project at Chery's Wuhu plant and will be exported to Mexico later this year with a Chrylser brand, perhaps Dodge as previously reported.

The new Chery A1 for export to Mexico is similar to the Chery A1 sold in China, both of which were designed by Stile Bertone, an Italian automotive design firm. It is an updated subcompact model of the Chery QQ, with a 1.3L gasoline engine capable of a top speed of 156 kmh. The Chery A1, aimed at young customers, is currently sold from 40,000 yuan ($5,750) to 65,000 yuan in the domestic market.

Dongfeng Nissan JV to launch 15 new models by 2012

Shanghai, May 29 (Gasgoo.com) Dongfeng Motor Co, a joint venture between Nissan and its Chinese partner Dongfeng Motor, announced an ambitious 5-year business plan to launch 15 new vehicle models in the next five years, China Daily reported today.

"We will add 10 passenger car models and 5 commercial vehicles in the period, and through this product offensive we aim to lift sales to 1 million units and sales revenue to 10 billion yuan (US$95.7 million) by 2012," Kimiyasu Nakamura, president of Dongfeng Motor Co., told the plans to reporters in Beijing yesterday.

Nakamura also announced that the joint venture automaker will open a 1 billion yuan ($144 million) LCV (light commercial vehicle) plant to underpin its lagging commercial vehicle unit.

Delphi, Lingyun launch auto-parts venture in Chery home

Shanghai, May 30 (Gasgoo.com) Saginaw Lingyun Driveshaft Co (Wuhu) Ltd, the joint venture of Delphi Corporation and Lingyun Industrial Group, has been completed in China's eastern province of Anhui and will put into operation next month.

Delphi is the world's largest auto-parts maker, and Lingyu is a leading Chinese manufacturer of auto parts. With total investment of 60 million dollars, their joint venture facility in Wuhu city (home to Chery Auto) of Anhui province will focus on making and selling drive systems, constant velocity universal joints (CV joints) and related auto parts. The new company will also provide after-market and technical services. The output of CV joints and driveshafts is expected to reach 700,000 sets in 2010. 

Chinese automakers eye bigger share of S. American market

Shanghai, May 30 (Gasgoo.com) Chinese automakers are moving early stages of business into the South American market via both local production and exports, but an industry analyst has given them a word of caution.

In mid-May, Lifan Industry Group, a Chinese motorcycle-manufacturer-turned-automaker, officially launched its Lifan 520 model in Peru. The family sedan runs on either petrol or compressed natural gas (CNG), which answers the local government's call for gas-powered vehicles. The current Lifan 520 is mainly used as taxies and has been appropriately modified for the local market. By cooperating with local importers, Lifan aims to be the largest Chinese car brand in Peru by the end of this year.