Automotive News - 2008 Guide to China's Auto Market - (Page 20)

20 DOMESTIC AUTOMAKERS CHINESE BRANDS GRAB SHARE Domestic brands sold the largest number of passenger vehicles in China in 2007, followed by Japanese brands. BRANDS 2007 SHARE 2006 SHARE Domestic brands claim largest share of market Despite competition from international brands, domestic carmakers sold the most passenger vehicles in China in 2007. Thanks to a wave of new models from such automakers as Chery Automobile Co. and BYD Auto Co., domestic brands grabbed 28.7 percent of the market last year. Japanese brands were second with 28.3 percent, according to Automotive Resources Asia, a unit of J.D. Power and Associates. Chery was the No. 1 domestic automaker. It sold 369,459 units in 2007, up 22.1 percent from 2006. It was followed by Zhejiang Geely Automobile Group, at 219,513 units, and FAW Xiali, at 180,280. With global automakers dominating the mid-sized and large segments, domestic auto manufacturers concentrated on small and inexpensive models. Their cars typically were priced between $4,500 and $14,000. Prodded by China’s government, large domestic automakers are launching their own brands. For instance, Dongfeng Motor Co. launched its first car, a small wagon, in October, while Guangzhou Automobile Group Co. displayed three concept cars in November. The industry also is attracting new players. Ningbo Bird Co., a mobile phone handset manufacturer, finally secured a license from government will continue to force ailing state-owned automakers into the arms of healthy ones. Domestic automakers continue to source low-priced auto parts from Chinese suppliers to reduce their costs. International auto giants, such as General Motors and Volkswagen AG, are following the same strategy. Increasingly they are localizing advanced components parts, such as some transmission parts, in China. To avoid the intense competition in the domestic market, Chinese automakers stepped up efforts to export to the Middle East, North Africa, the former Soviet bloc and Southeast Asia. Chery, the largest exporter among domestic auto manufacturers, exported more than 118,000 vehicles in 2007. While the domestic automakers are progressing, many are still years away from making high-quality cars that can compete effectively in Europe and the United States. But Shenyang Brilliance Jinbei Automotive Co. is trying to build sales this year in Europe after it reworked its BS6 sedan, which failed crash tests last year. Chery is proceeding with plans to build a U.S. car for Chrysler LLC. — Yang Jian Domestic Japanese European U.S. Korean 28.7% 28.3% 22.6% 13.6% 6.8% 27.7% 24.9% 24.1% 13.5% 9.7% Source: Automotive Resources Asia Ltd. the Chinese government to make cars at the end of 2007. With China’s automotive sector becoming increasingly crowded, the long-anticipated consolidation finally got under way. In December 2007, Shanghai Automotive Industry Corp. acquired Nanjing Automobile (Group) Corp. after the latter came under tremendous financial pressure following its purchase of the MG brand and Rover’s Longbridge plant in England. Both SAIC and Nanjing Auto are stateowned enterprises. The Chinese government was seen playing an active role in brokering the deal. Industry observers believe the Beijing Automotive Industry Holding Corp. No. 25, Dong San Huan South Road, Chaoyang District Beijing 100021, P.R. China (86) 10-6769-9888 Top executive: Xu Heyi, chairman Beijing Automotive Industry Holding Corp.’s 2007 performance was disappointing. Now, Chairman Xu Heyi is stepping up efforts to revive the state-owned automaker’s passenger-vehicle business. Neither of BAIC’s two joint ventures, with Hyundai Motor Co. and DaimlerChrysler AG, did well in 2007. Beijing Hyundai Motor Co.’s sales slumped 20.3 percent to 231,137 units in 2007. Sales of the once hot-selling Hyundai Elantra dropped 29.1 percent to 120,333 units, while Hyundai Sonata sales declined 31.2 percent to 25,528 units. Sales of Beijing Benz-DaimlerChrysler Automotive Co. dropped from the previous year to 19,730 units in 2007. For contrast, Daimler’s rival BMW boosted sales of its joint venture with Brilliance China Automotive Holding Ltd. to 32,249 units last year. Global JVs Beijing Benz-DaimlerChrysler Automotive Co. – Beijing – Mitsubishi Outlander; Chrysler 300C; Mercedes-Benz E class (Page 8) Beijing Hyundai Motor Co. – Beijing – Hyundai Sonata, Elantra,Tucson, NF, Verna (Page 13) A bright spot for Xu in BAIC’s operations is commercial vehicles. Selling more than 400,000 vehicles, Beiqi Foton was China’s largest commercial-vehicle maker in 2007. To reinvigorate its passenger-vehicle business, BAIC in late 2007 set up a holding company, Beijing Hainachuan Automotive Parts Co., for its 12 in-house suppliers, including its joint ventures with Delphi Corp., Johnson Controls Inc., Visteon Corp. and BorgWarner Inc. BAIC hopes that the holding company can boost the variety and quality of parts supplied to its joint ventures and its ownbrand vehicles. Beijing Hyundai sources a large portion of its components from Korea. Beijing BenzDaimlerChrysler also relies heavily on imported parts. Localizing parts will reduce costs. BAIC unveiled its own brand last year. It is expected to unveil more models at the 2008 Beijing auto show. Industry sources say the vehicles are mainly derived from previous generations of the Hyundai Sonata. After coming on board in late 2006 as BAIC’s chairman, Xu, a former Beijing municipal government official, has mapped out ambitious plans to rebuild BAIC. In February this year, BAIC hired Wang Dazong away from Shanghai Automotive Industry Corp. to be its general manager. Wang was trained in the United States and will be put in charge of developing BAIC’s own brand. BAIC aims to sell 1 million vehicles in 2008 and 2 million in 2010, including cars, SUVs and commercial vehicles. These are challenging targets for an automaker that sold fewer than 700,000 vehicles in 2007. — Lan Lan Beijing Automobile Works Co. No. 51, Fangjiacun, Guangqu East Road, Chaoyang District Beijing 100022, P.R. China (86) 10-8774-3332, www.baw.com.cn Top executive: Yao Changsheng, president 2008 GUIDE TO CHINA’S AUTO MARKET 2007 2006 Capacity Production Unit sales 100,000 11,190 11,343 100,000 2,759 2,892 Models produced: Luba, Suwei, Sujun, Zhanqi, Xuanfeng, Leichi Ownership: Bejing Automotive Industry Corp. 100% Automotive News • J.D. Power and Associates • Automotive Resources Asia http://www.baw.com.cn

Table of Contents Feed for the Digital Edition of Automotive News - 2008 Guide to China's Auto Market

Automotive News - 2008 Guide to China's Auto Market

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.