|
|
|
|
China still a magnet for auto
giants
BEIJING - China
remains a magnet for the world's auto giants,
despite slowing car sales and persistent concerns
over the nation's vehicle production capacity.
The 11th Shanghai International Auto Show,
to end tomorrow, has been a strong reflection of
the seductive power of China's auto market, as
foreign automakers paraded their products in a
record exhibition area of more than 120,000 square
metres. All have vowed to maintain or speed up
their expansion plans in China, although some are
suffering profit slumps and even huge losses
globally.
Troy Clarke, vice-president of
General Motors (GM), told China Daily that the
world's No 1 automaker will maintain "the pace and
timing" of its investment plans in China, even
though its sales in the country have decelerated
sharply. "China is still the most dynamic and best
place in the auto world today," Clarke said. GM
announced last June that it would invest a further
$3 billion jointly with partner Shanghai
Automotive Industry Corp to double its annual
production capacity in China to 1.3 million units
by 2007. GM's sales in China grew mildly to
132,000 vehicles in the first quarter of this
year, he said.
Last year, GM sold 492,000
vehicles in China, up 27% from 2003. But globally,
the company reported a 13-year record quarterly
loss of $1.1 billion during the first quarter.
Ford Motor Co, a latecomer to China's car
market in terms of local production, is recording
better results in China than ever before. On the
eve of the seven-day Shanghai auto show, Ford
clinched a deal with Japanese affiliate Mazda and
Chinese partner Chang'an Motor to build a
350,000-unit engine plant in Nanjing, capital of
East China's Jiangsu Province. The deal came less
than three months after the three parties
announced they would seek approval from Chinese
regulators to build a new car joint venture in
Nanjing, with an initial manufacturing capacity of
160,000 units a year, to produce Ford and Mazda
brand cars. The two projects are part of Ford's
$1.5-billion investment plan for China unveiled in
2003.
"We have seven brands attacking the
Chinese market...we will build market share in
China and we will do it profitably. We started a
little bit slowly, but we have built our momentum
rapidly," said Jim Padilla, Ford's global
president and chief operating officer. The seven
brands are Ford, Lincoln, Mazda, Volvo, Land
Rover, Jaguar and Aston Martin. Combined sales of
these brands in China surged 70% year-on-year to
170,000 vehicles in 2004.
"Lasting success
in China will not be won in a sprint. It is going
to be a very long endurance race - and we still
are in the early laps of this race," said Mark
Schulz, president of Ford's Asia Pacific
operations. "China's auto market is continuing to
see strong growth - no longer stratospheric
growth, but steady 8-10% annually. And there are
no other markets of this size anywhere that offer
car sales growth of 8-10% annually," Schulz said.
"As yet, only 3% of China's population owns a car.
That percentage will undoubtedly grow."
Ford formed a car joint venture with
Chang'an, in Southwest China's Chongqing
Municipality, in 2001. The venture produces Fiesta
compact sedans and Mondeo mid-sized sedans. Ford
will launch a 1.8-litre New Focus sedan at the
venture in the third quarter of this year. The
company also started selling Lincoln Navigator
sport utility vehicles in China as imports a week
ago. "We will consider producing Lincoln vehicles
in China if the car's sales reach the volume we
expect," said Chen Meiwei, chairman of Ford Motor
China Group. Mazda, 33.4% owned by Ford, will
launch four new models in China this year,
including a RX-8, two Mazda6 sedans and a Tribute.
Ford announced last week that its operating
profits dropped by $1.25 billion from a year ago,
to $579 million, in the first quarter of this
year.
Nissan Motor, one of the world's
most profitable automakers, also recognizes China
as an important contributor to its growth during
its three-year Value-Up plan, which began this
month. "We will significantly expand our product
lineup here and we expect most of our global sales
growth to come from this market," said Steven
Wilhite, Nissan's senior vice-president. "By the
end of Nissan Value-Up, we are expecting our China
sales to be over 500,000 units, making this our
third-largest market in the world," Wilhite said.
Nissan plans to launch four new models in
China this year, including the Tiida compact car,
Fuga luxury sedan, Quest mini van and 350Z sports
car. The 1.6-liter Tiida, produced at Nissan's
joint venture with Dongfeng Motor, was put on sale
just before the Shanghai auto show. The model
retails from 119,800 yuan ($14,500) to 159,800
yuan with sales expected to hit 40,000 this year.
Earlier this month, Nissan's Chief
Operating Officer Toshiyuki Shiga said the company
aims to sell nearly 180,000 own-brand vehicles in
China this year, up from 80,000 units last year.
As part of its Value-Up plan, Nissan aims to
increase global sales to 4.2 million by 2008 from
3.4 million units last year. Toyota Motor said
that it would start producing the Reiz sedan at
its joint venture in North China's Tianjin
Municipality with First Automotive Works Corp this
autumn. Last month, Toyota launched the Crown
sedan at the joint venture.
DaimlerChrysler plans to invest 1.2
billion euros ($1.56 billion) over the next three
to five years in China to expand its businesses,
said Ruediger Grube, a board member and China
chief of the German-US auto giant.
DaimlerChrysler's joint venture in Beijing will
start producing Mercedes-Benz E and C-Class sedans
in the second half of this year.
(Asia
Pulse/XIC) |
|
|
|
|
|
|
|
 |
|
|
|
|
|
All material on this
website is copyright and may not be republished in any form without written
permission.
© Copyright 1999 - 2005 Asia Times
Online Ltd.
|
|
Head
Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong
Kong
Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
|
|
|
|
