SAIC-GM-Wuling to establish new R&D center, will focus o
SAIC-GM-Wuling is establishing a brand new research and development center for its Baojun brand, the National Business Daily reported today. According to an official statement from the joint venture, the new Baojun R&D center will offer comprehensive functions and will provide support for its passenger automobile products.
Recently Brilliance BMW has welcomed its millionth automobile, that has rolled off the production lines. According to a report appearing in the National Business Daily today, Brilliance BMW President and CEO Kang Siyuan stated that two-thirds of the BMWs sold in China in the future will be domestically-produced. BMW Greater China President Karsten Engel added that China has long since become BMW’s largest market, with the manufacturer to dedicate over 2 billion euros in the country over the next five years.
Changan Ford is taking new steps as it eyes a coveted top three spot among China's best selling automobile enterprises. According to a recent report appearing in the Beijing Morning Post, Changan Ford may have already selected a name for its upcoming own brand venture - Jiayue (literally meaning "superior leap"). The brand's first model will be based on the classic Ford Focus. This information has yet to be officially confirmed by the manufacturer, with Changan Ford stating that it "will not comment on any future products."
The Guangzhou Automobile Group has recently released its sales performance report for the first half of the year, according to a China Business News report appearing today. The manufacturer has benefited greatly from the strong performance of its Trumpchi own brand.
SAIC-GM-Wuling has already made very impressive strides in the compact MPV market with its Wuling Hongguang, which has achieved considerable success in rural areas. Over 40 percent of the sales in the MPV market are of Hongguang vehicles. SAIC-GM-Wuling hopes to capitalize on this demand to increase its presence in the passenger automobile market.
Early last year, BMW China Trading President Xu Zhijun had stated that the sales ratio between domestically-made BMWs and imported ones was 4:6. BMW’s Chinese sales in 2014 totaled 455,000 units, representing year-on-year growth of 16 percent. Over half of those sales came from the Brilliance BMW joint venture.
The information regarding Changan Ford's new own brand comes from an official environmental rating on the "technological renovation" of Changan Ford's "I06 own brand passenger automobile assembly line". The announcement also mentions that Changan Ford's number one factory, located in the Chongqing New North Zone, is currently manufacturing the C307 Classic Focus, B515 EcoSport, CD391 Mondeo and a Volvo model with the Y483 number. According to the announcement, the factory's annual production capacity is 250,000 vehicles. In order to maintain competitive advantage, the factory may have to release a new product at any time, so the manufacturer needs to be active about making technological renovations. As such, Changan Ford has already begun doing work for the assembly line on which the I06 own brand passenger car will be made on. Production capacity for the I06 is designed to be 70,000 units per year. The project will involve technological renovation of the assembly line's pressure, welding, painting, general assembly and engine facilities, as well as improvements to logistic use equipment. Total investment in the project is estimated to be around one billion RMB , with production set to begin by September 2016.
According to the report, GAC Group's total revenue for the first half of the year was 10.76 billion RMB ; the figure represents year-on-year growth of 30.55 percent. GAC earned a total net profit of 1.73 billion RMB . The manufacturer's average stock price was 0.27 RMB per share, 41.61 percent than the stock price a year ago.
However, SAIC-GM-Wuling has been facing a significant problem with its Baojun brand, which is used for the JV's passenger automobile products. Technology R&D for the Baojun brand was primarily conducted by the Pan Asia Technical Automotive Center, a joint venture established by GM and SAIC Group. Unfortunately, this has lead to pressure from those two companies limiting the effectiveness of SAIC-GM-Wuling's R&D projects, which in turn has slowed down the pace with which the JV releases new models. By establishing a brand new R&D center, SAIC-GM-Wuling will be able to release new additions to its Baojun line at a faster speed.
Brilliance BMW has come a long way since its establishment in 2004, when it only possessed one factory with an annual production capacity of less than 10,000 units. Brilliance BMW’s domestically-produced models now include the 3 Series, 5 Series and X1 SUV. Three new domestic models are in the works, including a brand new entry-level compact. The joint venture has also entered the growing new energy vehicle market with the official launch of the 530Le today. Mr. Kang expressed his optimism for the future of the emerging market, adding that Brilliance BMW is fully committed to its development.
The announcement's content seems to be right in line with statements made by Changan Ford's top brass. Changan Ford President Marin Burela, when asked whether or not the joint venture was preparing to release an own brand, stated that future developments had to be observed before deciding upon a specific timeline. Experts believe that with Ford's '1515' plan for the China market nearing its end, Ford will slow the pace of new product releases for the market, perhaps moving its focus to its JV's upcoming own brands. The most important prerequisite is the existence of industrial policies encouraging own brand or new energy vehicle development. Currently Changan's number one and number two factories in Chongqing boast a combined production capacity of 650,000 vehicles, while the company's expected sales volume for this year is expected to be around 800,000 vehicles. After its new factory in Hangzhou begins production next year, the JV's total production capacity will reach 1.2 million vehicles, however this figure may not be enough to satisfy its rapidly increasing growth.
GAC Group's automobile production and sales volumes for the first half of 2014 were 581,100 units and 503,700 units, respectively. Growth rates for the two figures were both over ten percent higher than the industry average. GAC's passenger automobile division in particular performed very well, with a total of 571,500 passenger automobiles being manufactured and 494,200 sold in the first half of the year. The manufacturer's market share has grown 0.4 percent from the first half of 2013 to the first half of this year.
SAIC-GM-Wuling's new R&D center will be located at its Baojun site in Liuzhou, Guangxi. Construction on the site will be completed by December 2018 and will be divided into four phases. It will help boost the JV's R&D capabilities and allow it to mimic the success its already achieved in the commercial vehicle market in the much more lucrative passenger automobile market. A representative from the JV explains: "The reason that the Wuling Zhiguang and Rongguang gained favorable praise for customers is because we possessed our own independent R&D ability. We discovered that if there were any issues, we could quickly make modifications in line with consumer demands."
A representative from GAC boasted that, although outlooks for the own brand market as a whole have been very poor, GAC's Trumpchi brand has still managed to achieve year-on-year growth of 51 percent. Over 50,000 Trumpchi vehicles have been sold over the first six months of the year. A lot of this has been due to GAC's active support of the Trumpchi brand. One example is GAC Group's decision to invest 101 million RMB in its passenger automobile division in order to boost research and development for new energy vehicles. GAC has also approved its passenger automobile division to invest 2.61 billion RMB in order to expand its annual passenger automobile production capacity by an extra 150,000 units.
SAIC-GM-Wuling already possesses a R&D center for its Wuling brand, which is also located in Liuzhou. SAIC-GM-Wuling officially stopped working with the Pan Asia Technical Automotive Center last December, when it completed relocation of its staff to the Liuzhou R&D center. According to the above representative, SAIC-GM-Wuling already possesses some R&D talent specializing in passenger automobiles; this staff will become the new Baojun R&D center's core team.
Traditionally affiliated with Japanese manufacturers, GAC is also working to expand its partnerships with other companies in the industry. On the heels of its partnership with Fiat-Chrysler, GAC and BYD have agreed to cooperate in producing new energy-powered buses. By diversifying its partnerships, GAC has helped cut its risk significantly./
"If we want to achieve successful development in the long-term, we must establish our own independent R&D ability," the above representative stated. A representative from SAIC-GM-Wuling's PR department further explained: "The new R&D center will be a more professional and standardized technology site, and will greatly aid [the JV's] R&D of new passenger automobiles. Whether or not the two centers will only focus on the Wuling and Baojun brands has yet to be decided; [as] they both use the same system, resources [from the two centers] can be jointly coordinated."/
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