China Auto News of the Week (July 14 - July 18, 2008)

Xuzhou Machinery buys 60% stake in Chunlan Auto

Shanghai, July 14 (Gasgoo.com) Xuzhou Construction Machinery Science & Technology Co, a maker of construction equipment, said on June 10 it would pay 270 million yuan ($39.36 million) for a 60 percent stake in Jiangsu Chunlan Automobile, according to a Reuters report.

The purchase will allow Xuzhou access to the heavy truck industry, copying the development path of global leading equipment makers such as Volvo, the company said in a statement published in the China Securities Journal, cited by Reuters.

Chunlan Group, based in the eastern province of Jiangsu and a maker of air conditioners, entered the auto industry in 1997. Now the Chunlan Automobile produces five series of heavy trucks with load limits of 12-31 tons.

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Toyota to build $527 mln plant in NE China by Aug

Shanghai, July 14 (Gasgoo.com)  FAW Toyota Motor, Toyota Motor's joint venture with China FAW Group Corporation, will spend about 3.6 billion yuan ($527 mln) in setting up a new SUV production plant in the northeastern Chinese city of Changchun, a senior FAW official told The Economic Observer published today.

Citing the company executive, the newspaper said Changchun has eventually beat Tianjin in securing the project. The new plant is expected to expand the automaker's production capacity in Changchun from the existing 10,000 units to 200,000 units by 2013. Construction of the plant is reported to start by August this year.

The Toyota Auris sedan and Wish minivan may be produced at the new production facility, but the source said they will only unveil their product plan at the ground-breaking ceremony for the plant.

Mercedes-Benz H1 sales up 52% y/y in China

Shanghai, July 14 (Gasgoo.com) German automaker Daimler AG recently said that sales of its Mercedes-Benz brand grew 52% year on year (y/y) in the first half of 2008 in the Chinese market driven by an expanding wealthy customer base. From January to June, Mercedes-Benz sold in China a total of 18,000 luxury cars, including locally made and imported ones, the company said last Friday, as cited by auto.sina.com.

Sales of the imported S-Class vehicles were most brisk, with 6,800 units sold during the period, and China has become the largest Asian market for the Mercedes-Benz S-Class. Mercedes-Benz E-class sedans, made by its Chinese venture, had its sales up 26% y/y during the period, while sales of the elegant Mercedes-Benz CLK sports / comfort cars rose by 150% y/y. The company has not released the sales figures for its China-built C-Class, imported SUVs, or sports cars.

Shanghai VW tops China June PV sales with 44,600 units

Shanghai, July 15 (Gasgoo.com) The sales of Shanghai Volkswagen hit 44,618 units in June, leading China's passenger vehicle sales in that month, according to the latest industry statistics. The carmaker's rapid sales growth amid fierce competition is mostly attributed to the newly launched Lavida model.

The June sales rankings issued by the China Passenger Car Association show that Shanghai VW tops the list by selling 44,618 vehicles in June, up 16.13% month-on-month, followed by Chery Auto with 37,994 units, Shanghai GM with 37,921 units and FAW VW with 36,387 units. Shanghai VW sold a total of 272,009 vehicles in the first half of this year.

June / H1 sales of Shanghai GM models

Shanghai, July 15 (Gasgoo.com) Shanghai GM, General Motors Corp's joint venture in Shanghai, sold 248,799 vehicles (including export) in China in the first half of this year, a 10.6 percent growth from a year earlier, China Passenger Car Association (CPCA) said in a report released on Tuesday.

Sales of Chevrolet totaled 99.036 units in the January-June period. Sales of Buick brand vehicles made at the venture hit 146,340 units and Cadillac sales totaled 3,358 units, according to the report.

Buick LaCrosse hybrid going on sale for 300,000 yuan

Shanghai, July 15 (Gasgoo.com) Shanghai General Motors (GM) will launch its Buick LaCrosse eco-hybrid to the Chinese market this month, with a single 2.4L model priced at 300,000 yuan ($43,969) or less, Beijing News reported yesterday.

The LaCrosse rollout is the opening volley for what Shanghai GM calls its "Drive to Green" program. The LaCrosse eco-hybrid, based on 2007 LaCrosse 2.4L premium version which was sold for 249,800 yuan, is expected to sell for no more than 300,000 yuan.

Chery H1 sales rise slightly to 208,465 units

Shanghai, July 16 (Gasgoo.com) Chery Automobile Co sold 208,465 vehicles in both domestic and overseas markets in the first half of this year, slightly up by1,371 units from a year earlier.

It sold 23,784 Tiggo SUVs, 3,725 New Qiyun cars, 938 Karry MPVs, 79,112 QQs and 53,303 A-series cars during the January-June period.

Analysts said homegrown automakers, such as Chery, were particularly hurt by an oil price hike of nearly 20% starting in May as consumers who originally planned to buy small, cheap cars may definitely change their minds, and in contrast, potential consumers who can afford bigger cars won't be affected much.

SAIC, FAW leap forward in Fortune 500 rankings

Shanghai, July 18 (Gasgoo.com) China's Shanghai Automotive Industry Corporation (SAIC) and FAW Group Corporation (FAW) both move forward by leaps and bounds in the latest rankings of 2008 World Fortune 500 published by US Fortune magazine recently.

SAIC was rated at the 273rd position in the Fortune 500 with 2007 sales revenues of $22.607 billion while FAW was ranked at the 303rd with revenue of $26.391 billion. The two Chinese automobile groups claimed the 475rd and 470rd spots respectively last year.

Though lagging behind FAW in sales revenue, SAIC's sales volume was the highest in 2006 and 2007 in China and hit 990,000 cars during the first half of 2008. FAW sold 870,000 vehicles in the Jan-June period with sales revenue of $16.258 billion.

Top on the Fortune 500 list remains the US retail giant Wal-Mart, followed by Exxon Mobil and Royal Dutch Shell, two petrochemical firms.