Bayerische Motoren Werke AG (BMW)’s Rolls- Royce sold out a $1.2 million Year of the Dragon Phantom model introduced to lure buyers in its biggest market of China, where the company predicts growth will be less “explosive” in 2012.

Chinese customers want highly bespoke cars with features such as drink cabinets and embroidery, Rolls-Royce Motor Cars Chief Executive Officer Torsten Mueller-Oetvoes said today. To meet demand, the company will add dealerships in mainland China’s so-called second-tier cities, adding to the 14 it has in Greater China including Hong Kong, the city with the highest density of Rolls-Royce drivers in that region, he said.

Buyers in China want “marvelous embroidery work, so for that reason we’ve created a Year of the Dragon special edition for the Phantom,” Mueller-Oetvoes said in a Bloomberg Television interview in Hong Kong. “It is red, of course, also as being the color of luck.”

Rolls-Royce is catering to a market that has become the biggest for automakers from Bentley Motors Ltd. to General Motors Co. and where the number of millionaire households has surged by almost a third. The London-based maker of luxury cars faces the prospect of slower demand in China as growth may ease in the world’s second-largest economy this year.

Rolls-Royce began taking orders for the Dragon-year Phantom in August and sold out the model within two months, said Hal Serudin, a Singapore-based company spokesman, who declined to provide sales figures. Prices for the special model start at 7.4 million yuan ($1.2 million), he said.
Hand-Painted Dragons

Features of the special-edition Phantom include a gold dragon hand-painted on the side of each wheelbase, the mythical creature embroidered on headrests, and hand-stitched cushions for rear passengers.

Rolls-Royce will add fewer than 10 dealers in Greater China this year, Serudin said. The carmaker currently has 14 dealerships in Greater China, which includes mainland China, Hong Kong and Taiwan.

“I’m optimistic that we will see growth in the Greater Chinese market,” Mueller-Oetvoes said. “It might not be as explosive as it was a couple of years before, but I’m very confident.”

The number of millionaire households in China jumped 31 percent in 2010 to 1.11 million, ranking it third behind the U.S. And Japan, according to a Boston Consulting Group survey released last year.

Growth at Rolls-Royce may ease in tandem with a slowing economic outlook for China. The nation’s economy may expand 8.5 percent this year, receding from an estimated 9.2 percent in 2011, according to the median estimate of economists in a Bloomberg News survey.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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The interview between Thoughtful Media and Ford’s Vice President of Distribution, Nigel Harris gives some clear insights on how Ford reaches consumers and how it reels them into the brand. Although Ford’s sales lag behind GM’s sales, Ford is very pro-active in reaching potential consumers via traditional print media, social media and internet advertising. Having met Nigel myself a few years ago in Chengdu I can confirm that he is more than up to the task of clearing Ford dealerships of Ford vehicles.

Before Ford launched the Ford Fiesta in the Chinese market Ford sent out its high up executives to follow various ‘mei mei’ around town, (mei mei of course being the term for a young girl), before this sentence takes a turn for the worst Ford’s goal was to better understand the target audience for the Fiesta ahead of its launch as well as small car buyers in general. Ford wanted to have a greater understanding single, independent, female executives with an income of around 1500USD per month. Judging from Fiesta sales over the course of 2011, it seems that Ford’s homework really paid off, the Fiesta was one of the better selling small cars last year although it did face some strong competition from newer models over the course of 2011.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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The L6 will be positioned above the recently-released G6 in an attempt to seize a piece of the rapidly-expanding luxury auto market. The L6 will likely come available with the  same power-train as the G6: BYD’s own 1.5L/1.8L TID series (TID=Turbo-charged/Direct Injected/Dual Clutch Transmission), though a 2.0L version is likely in the works.

The L6 also appears to leverage BYD’s core strengths: electronics. While the G6 introduced some nifty features such as a tire-pressure monitoring system, LCD dashboard display, and BYD’s own driver fatigue monitoring system, the L6 will likely come with a lot more. Spy-shots reveal a neat 10.2 inch touch-screen display in the dash and rumors are swirling of other high end features. Also, on the safety front, expect knee airbags and a 5-star C-NCAP rating.

The luxury car market will be a tough nut to crack as it is traditionally been dominated by well-known foreign brands and BYD is not alone among Chinese auto-makers seeking to push into this market. it seems that, thus far, BYD is back on the right track. Their newest models, the S6 and G6 have been instant hits. The S6 SUV has become the second hottest selling SUV in China (and first domestic SUV to receive a 5-star crash test rating), meanwhile the G6 became the top-selling domestic vehicle in its segment after just 3 months on the market.

Time will tell if the F5 and L6 prove their worth, but the spy shots are certainly encouraging.

Jeff Lundblad

Graduate from the University of Illinois in Political Science, Jeff Lundblad has been following China news since age 15.

When the Chinese auto market got its wheels spinning in early 1995 the market was spit down the middle quite evenly, you had a fairly constant 60-40 split of commercial vehicles and passenger car vehicles, in the early days it was companies buying trucks and government departments buying cars, later on as incomes improved regular citizens would buy cars as well. In 2005 passenger car vehicles outsold commercial vehicles for the first time and set the trend for the next six years. In 2011 the auto market received a bloody nose, auto sales growth increased by a mere 2.5%, the slowest it had been since the mid 1990′s and way behind the break neck growth rate seen in the previous five years. So what is exactly happening in China?

Many fingers have been pointed at the lack of low tax rates for sub 1.6L vehicles, in 2009 tax rates were lowered to 5%, then raised to 7.5% in 2010 and raised back to their pre-2009 rates of 10%

In 2011 sub 1.6L cars continued to see steady sales with sub 1.6L contributing over 9.83 million units to the total sales figure of 18.50 million cars sold last year, thus sub 1.6L cars stood for 53.2% of the market and saw an increase of 0.8% over 2010′s figure for sub 1.6L cars – showing that its not all about preferential tax systems.

Chinese branded cars sold 6.11 million cars in 2011, a fall of 2.6% and caught just 42.2% of the market, Japanese brands initially seemed to be ahead in the early years but have been caught up and over taken by Chinese brands. Of course the overall market situation is that foreign brands when clumped together dominate the Chinese market.

In 2010 the government introduced a fuel efficient subsidy of 3000rmb for cars that were able to meet fuel efficiency levels of 6.9L per 100km, for 2012 this no has been increased to 6.3L per 100km which will give Chinese manufacturers another hurdle to cross, however 148 cars currently meet this criteria.

4 car manufactures saw their production and sales jump over the 2 million cars barrier in 2011, in particular SAIC made nearly 4 million cars in 2011. Dongfeng, FAW, and Chang’an saw sales of 3.05 million, 2.6 million and 2 million units respectively, whilst their products accounted for a combined 11 million units and took 62.9% of the market.

CatherineQu

The current Roewe 750 has been on the market for nearly six years and itself was developed in the late 90’s by Rover as the Rover 75 when BMW were in charge of the long bankrupt British car manufacturer, both the MG7 and Roewe 750 are looking long in the tooth in 2012 and are in desperate need of a new generation of car to take them into 2012 and 2013.

The new 750 will likely also be the base for a new MG7, although nothing has been confirmed as of yet.

FrankF

Frank entered the automotive industry via his father's instructions. He grew up with cars around him, especially as his father was a major auto restorer, Frank's childhood was spent passing beers, tools and coffee to his father whilst he explained the ins and outs of engines. Frank now works in the Chinese car industry at a specific manufacturer.

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From China Daily:

Swedish delegation made up of government officials, representatives from the Swedish automobile company Saab was on the way to China on Wednesday for meeting the Chinese car manufacturer Youngman which is interested in purchasing Saab, reported Swedish media.

Senior officials from Vastra Gotaland region and Trollhattan city where the Saab company is located are on the delegation group. The meeting between the delegation and Youngman will be due on Thursday and Friday, said the Swedish newspaper Gothenburg Post.

“We are going to China to present what the region can contribute on the issue. We will do all that we can to get the best solution for Saab,” said Birgitta Losman, an official from the regional government.

According to Swedish Daily, the mayor of Trollhattan Annika Wennerblom will present her willingness and support for Saab to find a new owner.

Since earlier 2011, Saab had been trapped in difficult situation that production in Trollhattan, western Sweden, has stopped and wage payments have been late for months. A Swedish District Court approved Saab’s bankruptcy petition last month.

According to a statement from Saab’s parent company Swedish Automobile in Holland on Wednesday, four members have left the board of directors because they could not reach an agreement with the president Victor Muller on how to finance the parent company after Saab’s bankruptcy, leaving Muller as the only one in his board.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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The slow down in the Chinese market is being blamed on a number of issues, primarily the lack of subsidies towards car buyers. In 2009 the government lowered sales tax on sub 1.6L displacement cars to a mere 5% to encourage consumers to buy automobiles, by 2010 this tax had been raised to 7.5% and then restored to its original 10% in 2011 which has put many off car buying. Increased inner city congestion in certain tier two cities, especially those cities that are suffering from increased road works owing to subway line development has also put consumers off car ownership, increased fuel costs are also likely to blame.

Overall the Chinese market grew by just 2.45% in 2011 with total sales of 18.5 million and total production of 18.4 million vehicles over the course of the year. Certain segments did see strong growth, SUV’s for example grew by 20.19%, and MPV’s were up by 11.74%, showing that there is still plenty of strong growth in these areas, particularly family use MPV’s. Commercial vehicles are always a strong indicator of a healthy economy, but in 2011 sales of CV’s dropped by 6.31%, buses and coaches were up 13.25%, trucks were down 4.57 whilst larger semi trucks were down by a staggering 27.37%. Sales of small mini vans such as the type produced by Wuling and Chang’an reached 2,140,766.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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The Morgan Motor Company was established in 1909 in Malvern, Somerset, and has chosen to remain a niche manufacturer, and believes that Morgan’s Englishness and dedication to traditional craftsmanship will prove to be attractive to the automotive connoisseur in China. Under the leadership of Charles Morgan, CEO and grandson of the founder of Morgan Motor Company, the Company has become a global brand, which offers a range of Classic, modern, and 3 wheel vehicles; all of which are hand built, offer class leading performance, and are Euro V compliant.

Steve Morris, Operations Director of Morgan Motor Company Limited said, “China is a key market for Morgan Motor Company and we are delighted to have appointed Morgan Cars Limited in Beijing as part of our long term strategy to bring the Aero, Roadster, Eva GT and 3-Wheeler to China.”

Morgan is targeting 1,500 deliveries worldwide in 2012 of which upto 50 are forecast to be ordered by Chinese customers.  The new 3 Wheel model joins four-wheeled designs that include the 125,000 pound AeroMax, which has a 367 horsepower V8 engine and can reach 170 mph, and the “Classic” range of 1930s-styled roadsters including a newly launched Morgan+8 which offers classic styling with a modern BMW V8 powertrain. In the USA the 3 Wheeler is being sold as a motorized tricycle to avoid a car import license, and the Company is investigating the best way to make this vehicle available in China.

Morgan is aiming for limited sales of just 1500 units to worldwide markets in 2012, however they hope that 50 of those sales are made in China.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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From the NYT:

The machinery maker Shandong Heavy Industry Group sealed a deal Tuesday to take a 75 percent stake in the debt-laden Italian luxury yacht maker Ferretti, the latest in a series of Chinese acquisitions of European brands.

Chinese companies have been taking advantage of Europe’s financial woes by picking up assets relatively inexpensively, acquiring top brands as a shortcut to global success.

The deal for the Italian company also reflected the growing demand for luxury in mainland China, where new marinas are sprinkled along the southern coast.

“China is one of the most rapidly developing countries for the yachting sector and has great potential,” the companies said in a statement released at a signing ceremony in Jinan, in eastern China.

The Ferretti Group chairman, Norberto Ferretti, said the deal would help his company tap the global yacht market, estimated at €7 billion, or $9 billion, “and meet growing Chinese demand for luxury goods for the coming 5 to 10 years.”

Ferretti’s management team, headquarters and production bases will remain in Italy, the companies said. Shandong Heavy said it planned to build yachts in China for the domestic market.

“China offers an opportunity to our companies, especially when our economy is not going well,” said Anton Francesco Albertoni, head of the Italian marine industry association, Ucina.

Italy has long dominated the yachting industry, which contributes €3.36 billion to the country’s economy annually.

“Chinese are learning fast and well,” Mr. Albertoni said. “They love their marinas and golf clubs.”

Shandong Heavy will seek a separate share listing for Ferretti in Hong Kong in three to five years, the chairman, Tan Xuguang, said.

Under the deal, Ferretti’s roughly €580 million of existing loans will be reduced to €116 million. In addition, Ferretti will receive a new €80 million revolving credit facility, said John Davison, global head of strategic investment at Royal Bank of Scotland, one of Ferretti’s main creditors.

Shandong Heavy will make a €178 million equity investment for its 75 percent stake in the business. There will also be a €100 million capital increase, Mr. Ferretti said.

Lenders will receive the remaining 25 percent stake in Ferretti through an additional €25 million equity injection, with Royal Bank of Scotland and Strategic Value Partners each receiving half.

Founded in 1968, Ferretti was saddled with €1.2 billion of debt in 2007 after the company’s leveraged buyout by Candover Partners.

The company defaulted on its debt in January 2009 during the economic downturn.

Ferretti’s lenders agreed in April 2009 to write down the debt to €560 million in return for a 53 percent stake from Candover, which lost its investment in the firm.

Shandong Heavy makes construction machinery, power systems, commercial vehicles and automobile parts. It is the parent of the diesel engine maker Weichai Power, whose shares are listed in Hong Kong and Shenzhen. Shandong Heavy had operating income of 107.6 billion renminbi, or $17 billion, in 2010.

Ferretti, which owns the Pershing, Riva and Ferretti Yachts brands, ranked first in the 2011 Global Order Book, the benchmark annual report on the nautical industry by the magazine ShowBoat International.

The 2008 crisis hit the yacht industry hard, prompting many companies to seek partners in cash-rich emerging countries, a trend that is likely to continue as the euro zone’s debt crisis shows no signs of abating. In China, yacht imports increased threefold from 2009 to 2010.

“The opening of new marinas, yachting facilities and yachting events in China, especially on the southern coast, is actually fueling demand for yachts,” said Olivier Burlot, managing director of the international yacht brokerage firm Simpson Marine, based in Hong Kong.

Other Chinese companies that have made big acquisitions overseas include the automaker Geely, which bought Volvo from Ford Motor in 2010, and Lenovo Group, which bought the personal computer unit of I.B.M. in 2004.

Last month, China’s Three Gorges Corp. purchased the Portuguese government’s stake in the utility Energias de Portugal for €2.7 billion.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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The Volt will eventually sold in 13 cities later this year through special dealerships, the Volt is priced at 498,000RMB in the Chinese market, its high pricing being blamed on higher import taxes.

FrankF

Frank entered the automotive industry via his father's instructions. He grew up with cars around him, especially as his father was a major auto restorer, Frank's childhood was spent passing beers, tools and coffee to his father whilst he explained the ins and outs of engines. Frank now works in the Chinese car industry at a specific manufacturer.

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Due to the fast development of Chinese car market, the appetite of Chinese buyer changes rapidly. Mini SUVs and compact cars are back. This time, they are not the synonym of “cheap and cheerful”. They are small and fine.

Ford EcoSport is a SUV sharing the platform of Ford Fiesta. The name came from a model based on a SUV building on the platform of Ford Mondeo and sold in Brazil. Now the new body with old name will be unveiled at New Delhi Auto Show. EcoSport is part of “One ford” concept targeting the EU including the UK, South America, North America and China. A source of Netease Auto said that an insider of Ford revealed that a Mini SUV with Fiesta beneath will be localized and put into market in 2014. Now the pre-production research project has been launched in the R&D center in Nanjing.  

In terms of outlook, lower at the front bumper and side sills are covered with plastic coating, while the car is also equipped with muscular wheel arches and spare tire fixed on the back, which further underscores the model’s off-road intentions. A chrome luggage rack was equipped on the roof, rear side windows are equipped with the Ford-specialized lines up window design. EcoSport features a large trapezoidal front grille, and a slimmer front light. The design was from Ford Evos launching on the Frankfurt Auto show.

The power, Ford EcoSport will be equipped with Ford’s first new three-cylinder 1.0 l turbocharged EcoBoost engine. This engine will output 118 horsepower and 125 lb – ft torque.

Since the Indian market will be the new models’ first landing market, EcoSport will be launched in the New Delhi auto show. In addition, the New Delhi auto show is becoming increasingly  important. Jaguar Land Rover will be absent in Detroit auto show, but only to focus on the New Delhi auto show.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

The vehicle reliability study measures eight categories of issues ranging from the power-train to exterior paint quality from 13-36 months of ownership. Figures are given in terms of Problems Per 100 Vehicles (PP100), thus a lower number indicates higher quality. China’s overall vehicle score came in at 218 PP100 in 2011, compared with 298 in 2010.

China’s own brands clocked in at 309 PP100, having decreased by 135 PP100 since the previous study.

BYD’s FO came in first place for the compact vehicle segment with the FAW Pentium B70 scoring highly in the premium midsize segment.

Jeff Lundblad

Graduate from the University of Illinois in Political Science, Jeff Lundblad has been following China news since age 15.

Obviously, it is good news for BAIC on the eve of listing on the stock market as a whole. Insiders believe that BAIC are paving the way for the overall listing with all the effort. Optimizing the capital structure is an inevitable path, building the own-brand car is the key in BAIC’s listing strategy after Xu Heyi took office.

Qualification for own-brand passenger car approved

According to a source, the application was sent in late September and it was approved within three months. BAIC has completed the review of product, production conditions, and a series of energy-saving environmental protection requirements.

Since there are favorable policies to support the development of own-brand, enhancing own brand becomes an important part for BAIC’s financing capacity. Although, BAIC owns the Chinese assets of Beijing Hyundai and Beijing Benz, its own brand’s performance is far from satisfying. Thus to achieve the overall listing, BAIC must develop its own brand, and optimize asset structure.

Powertrain to achieve breakthrough

December 2011, BAIC welcomed its happy time. In end of December, BAIC announced that the National Development Bank had provided 30 billion to support the development of BAIC’s own brand. It is an undoubtedly powerful booster for the expanding BAIC.

Also in late December, BAIC successfully acquired the Swedish Weigel transmission plant and all the equipment and technical documents. This means a breakthrough for BAIC’s transmission capacity.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

China’s recent move to take finished automobiles off of a list of industries where foreign investment is encouraged will not affect the operations of existing Sino-foreign joint ventures in China’s auto sector, an official with the country’s top economic planner said.

The National Development and Reform Commission (NDRC) and the Ministry of Commerce jointly issued a new guideline for foreign investment last week, moving “finished car manufacturing” from the “encouraged” list to the “approved” list.

An NDRC official explained that the move was the result of excesses in both production capacity and finished automobile companies in China.

“It was a normal adjustment in light of the development of China’s auto industry,” said the official with the NDRC’s department in charge of foreign investment, who declined to be named.

“There is no such issue of tightening up, nor will it affect the operations of existing joint ventures in China,” the official said.

China has been the world’s largest auto producer and market by volume since 2009. Its auto sales reached 18.06 million units in 2010, while output rose to 18.26 million units.

The country has more than 130 finished automobile producers, more than any other in the world, but the companies are scattered and not strong enough as mergers and acquisitions have been slow.

Lured by market booms in previous years, many Chinese firms made ambitious plans to expand production capacity. But they may have run into a cooling-off period this year caused by the expiration of car purchase incentives and worsened by the government’s macro tightening measures.

China’s auto sales rose just 2.56 percent year-on-year to 16.82 million units in the first 11 months of 2011, a dramatic drop from 34 percent in 2010 and 42 percent in 2009, according to the China Association of Automobile Manufacturers (CAAM).

The government has been controlling the approval of new finished auto projects more rigorously in the past two years in order to curb overcapacity, the official noted.

“However, that does not mean we are tightening policies over foreign investment in the auto industry,” he said. “Instead, we aim to guide foreign investment into projects with better market prospects and higher returns.”

China is the biggest market for major global auto companies such as Volkswagen and General Motors. About 70 percent of domestically-made sedans are produced by Sino-foreign joint ventures in China, which also dominates the most profitable middle- and high-end markets.

China continues to welcome foreign investment in its auto sector and encourages transnational auto firms to set up research and development centers in China and invest in key technologies, auto parts and components, the NDRC official said.

The government’s new guideline encourages foreign investment in areas such as the manufacturing of gasoline auto engines with power per liter at 70 kilowatts or above, as well as key auto components and parts for alternative-fuel cars.

The new guideline made the country more open to foreign investment by adding encouraged items, reducing limited and prohibited items, and lifting caps on the proportion of foreign capital in some sectors, the NDRC official noted.

In the first 11 months of this year, China attracted 103.77 billion U.S. dollars in foreign direct investment, up 13.15 percent from the previous year.

Compared with previous guidelines, more foreign investment is encouraged in energy-saving and environmentally-friendly technologies, new-generation information technology, biotechnology, high-end equipment manufacturing, alternative energy and advanced materials.

The guideline will take effect Jan. 30, 2012.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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Bottleneck of power

According to the latest information, in order to obtain NDRC approval, Chery’s joint venture with JLR have to compromise on several key points, such as the establishment of and R&D center, more investment in vehicle development and technology transfer,and building an engine plant in China.

JLR has long been a member of the Ford Group, which holds all the initiatives on engine. Even after the acquisition by India’s TATA group, due to poor strength of technology, and the lack of appropriate technical support capabilities, TATA bought the brand of JLR, without involving in management, research and development and other key sectors. By contrast, Chery is the owner 2.0TGDI (supercharged direct injection) engine with regular version and enhanced version, and recently has begun a small-scale trial production. Its parameters and standards are no difference with Ford 2.0TGDI. It is a big temptation to JLR, meanwhile the possibility for Chery 2.0TGDI engine to produce in Britain is another temptation.

Models and platforms

The latest news says that the joint-venture will launch a third brand, which is jointly owned by both sides, and its production time will be roughly 2015-2016.

Another concern  is the XF platform. The sales model of XJ might be imported into domestic market as other competitors do. However, XF platform is a competitive one. It can be developed to a mid-level luxury car such as Audi A6L, and BMW 5Li.

In addition, JLR may also launch a SUV specialized for Chinese market. Currently, the SUV craze is sweeping China’s automobile industry. SUV’s are high priced when compared to similarly specc’d sedans. The Freelander 2, a best seller for JLR all over the world, according to sales statistics statistics from January to November 2011, total sales of Jaguar Land Rover is 37,000, with Jaguar 5,100 and Land Rover nearly 32,000, of which Land Rover Freelander 2 SUV occupying the biggest proportion. Thereofore, it is not difficult to adapt a new SUV based on the platform for Chinese consumer’s taste.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

One source said that the case contains 300 million Yuan of one-year revolving credit loan, and 2.3 billion Yuan of five-year loan; a report from October 19 said that the loan structure is bilateral. The interest rate is 100% of the benchmark rate of People’s Bank of China, but a source said, pricing is still subject to change.

And it is mentioned by a number of sources that Bank of Beijing may be involved. Funds raised will be used to build a new engine plant. This loan case will be closed in January.

Beijing Benz’s other two financing plan are still on the market, one of which is a 5.4 billion Yuan six-year loan led by Bank of communications. The loan will also be used to build the new engine plant, with interest rate 100% of the benchmark rate of People’s Bank of China.

Another case was a 4.8 billion Yuan 8 year loan led by the Agriculture Bank of China. National Development Bank also joined the leading bank; Bank of China, Merchants Bank and Everbright Bank joined the issuing bank together. Interest rate is the same as above, with grace period three years.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

The 1 millionth car is a landmark to lay a solid foundation of sustainable development of enterprises in the future for the FAW – Volkswagen. In 2007, according to the prevailing market prospects and their own strength, the FAW – Volkswagen raised “one million” concept – to 2012, the annual production to exceed 1 million. Due to the soaring production capacity, FAW – Volkswagen completed one million cars ahead of time. This year, the FAW – Volkswagen focuses on building a system of research and development, procurement, production, marketing, quality, finance, human resources, organizational optimization. It aims to complete three major production bases in Changchun, Chengdu, and Foshan. Meanwhile the FAW – Volkswagen emphasizes on the system of recycling, ability cultivation, in order to be stronger rather than bigger. In 2015, it is planned to achieve the production capacity of 1.65 million with the support of three major production bases in Changchun, Chengdu, and Foshan.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

In recent years, Beijing Benz has grown rapidly in the Chinese market. In the first 11 months in 2011, its sales volume increased 52% year-on-year achieving a rapid growth which is among the best in Chinese auto industry.

The exported version of the Mercedes-Benz E-Class has a larger rear leg space but carries the same gasoline engines as the version sold in China. Beijing Benz, President Frank Deiss hopes, the long-wheelbase E-Class sedan will become a stepping stone to explore the overseas market in the future.

Insiders said the Chinese market and overseas markets will form twin engines to support the development of Beijing Benz. As a result, it will also benefit BAIC to optimize the upstream and downstream industry chain, to promote the regional economic development, and to enhance the position and influence of Beijing area in the territory of the national auto industry.

Xu Heyi, the chairman of BAIC as well as the Chairman of Beijing Benz Automotive Co., Ltd., said the export of E-Class long wheelbase to international markets is a strategically important breakthrough in the process of internationalization of Beijing Benz, meanwhile it is an important turning point. It also indicates that the cooperation between China and Germany will getting deeper and wider in the future.

Other car manufacturers, such as BMW and Honda have been actively exporting their Chinese made products for a number of years, Honda was one of the early China exporters with its Honda Fit/Jazz being sold to Europe and more recently to Canada, BMW have only just started exports of the BMW 5-Series L model.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

Chery Boss - Yin Tong Yue

Recently in a Chery high-end brand Riich G3 release conference, Yin Tongyue, the chairman of Chery said, “China will re-define National Brand, which refers to a brand with completely independent intellectual property.” aka Sub Brands. This statement directly targeted to the joint venture brands, and Yin’s words marked a signal of National Brands’ counterattack.

According to the newly released policies, the proportion of national brands in public procurement vehicles will be approaching 50% in the future. The new standard of the official car purchase says more clear, “Party and government departments should be equipped with domestically produced cars, procurement policy priorities should lean forward to national brands and new energy vehicles.”

Official cars procurement policies will undoubtedly received great éclat from national car manufacturer. Trumpchi of Guangzhou Automobile, Besturn B70, Roewe 550 and other models are aiming to this market. Moreover, the optional 1.8-liter engine models that meet the policy requirements will capture more market share. Yin Yue also expressed the expectation of the official car market: “As a premium brand, Riich G6 is specially built for Government officials.”

Apart from Chery, other national brands are also forming a complete product line. Geely, for example has Geely, Maple and three sub-brands, Global Hawk, Emgrand, Englon. Insiders believe that, if the government intends to re -define national brand,a series of policies will incline to the 100% independent national cars. Thus whether the national brands can make full use of the policy advantages becomes a key to win back consumers.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

Gary Tan at Ricardo

Ricardo is probably just as famous a name as any car manufacturer in automotive circles, the engineering consultancy that was founded by Harry Ricardo in 1915 has grown from being a small consultancy working on early diesel engines into being a worldwide multi industry consultancy for anything that requires engineering, technology, project innovation and strategy. Ricardo’s client list spans the globe, as does their office network, we caught up with Ricardo’s recently appointed Asia President Mr. Gary Tan to get his thoughts on the development of the Chinese car market.

1. When did Ricardo enter the Chinese market?

While Ricardo is almost 100 years old, our first entrance in China was way back in 1975 and we secured the first contract developing a new gasoline tractor engine for a Chinese client not long after that and also worked with Dalian locomotive works on railway engines.Subsequently Ricardo was awarded numerous engine contracts leading to us setting up a local office in China in 2005 to better support and service our customers in China.Some of the exciting projects that Ricardo had being involved in China are: partner to Cheryin the development of a Hybrid vehicle that was used as the official car in the Beijing Olympics, a new 8AT transmission for a local transmission manufacturerShengrui, supply chain evaluation and management for a major global automotive manufacturer, Production Hybridization (BSG) of Passenger Vehiclefor a local customer. Moving forward, we will further expand our operation here in China to increase both our technical support capability and facilities. Ricardo will use China as a base for support of our Asia business in the near future.

2. Have you ever had any cultural issues when working with a Chinese client.

Most foreign companies had, at one time or another, cultural issues when working with a Chinese client. Looking it the other way, most Chinese companies had cultural issues working with foreign companies as well. We certainly had our challenges but generally it is manageable.I also believe that most of the cultural issues arise out of communication, as the old saying goes “if you don’t say what you mean, you don’t mean what you said”. The Chinese are not very comfortable in expressing themselves in a foreign language, and in a lot of cases that had led to misunderstandings. Being an Asian myself with Chinese descent and also having the pleasure of being educated in the west, I do have appreciation of both the cultures and this has helped avoid cultural conflicts. One of the effective ways of avoiding cultural conflicts is to have cultural training for both the foreigners and Chinese as it is always a two way street. Also, through our successful project collaborations with numerous Chinese customers, including working very closely with Chinese colleagues in the UK and China, Ricardo staff are developing a strong cultural understanding of Chinese business.

3. What are the main business areas of Ricardo in China? Which parts of business have not been brought into China? And what is your further plan?

Since our entry into the Chinese market we have been focusing on the engine, transmission, control/electronics and hybrid part of the automotive sector. Our services and technology are equally applicable to other industriessuch as off -highway vehicles, marine,agricultural vehicles, rail, clean energy, and motorcycles. We are also equally capable in offering intelligent transport system solutions, vehicle systems evaluation, strategic consulting and Ricardo’s engineering software. Moving forward from a business perspective we will expand both our reach into other industries, and also our range, offering broader range of services in the China market. In parallel, we continue to increase our local technical capability to include conducting R&D work for the Ricardo group and the development of test facilities in China to better support local customers. China will also be the technical hub for Ricardo to support Asian activities in the medium term.

4. What kind of clients are your main clients in China? We understand that you don’t just handle automotive clients but take on other geared engineering projects

Our clients in China are mainly domestic vehicle manufacturers or key Tier 1 suppliers.  We are active in all sectors of the automotive market and are supporting vehicle projects for customers at all levels, from major high volume manufacturers to smaller, niche volume players.  We are also active in other sectors such as off-highway, agricultural and wind energy where strong domestic and export market growth potential are leading customers to come to Ricardo for access to new technologies.  Our strategic consulting business is also actively working with Chinese clients to help them face the challenges of rapid expansion, new technology adoption and their ability to address global markets.

5. And what do you do for them? Is the R&D of transmission and hybrid system your strong point?

Ricardo’s key advantages lay in the breadth and depth of our expertise in gasoline and diesel engines, transmission systems, driveline, hybrid and control systems design, as well as in our open approach to sharing our design, development and industrialisation skills and expertise with our clients.  This is supported by the consistent and significant investment we make each year in internal research to ensure we are constantly developing new vehicle technologies for future applications.  Our extensive portfolio of successful projects for global clients, spanning world markets, allows Ricardo to provide highly effective, targeted technical solutions to meet the growing demand for improved fuel economy, refinement and technology content in Chinese vehicles.

6. What do you think about Chinese car market in the coming decade? The growth rate and local brands’ share?

I certainly think that the Chinese car maker has made tremendous progress in getting to where they are right now in a very short time.When I first started my involvement in China about 10 years ago, the car market was fewer than 1 million cars:now we are looking at the biggest car producing country in the world.Strong growth will continue in the short to medium-term supported by strong domestic market demand.It is interesting to compare the progress and also the acceptability of Chinese car makers to that of Japanese and Korean car makers.  All of which had play a catch-up game with the their more mature competitors in the past, all of which had been initially branded as low cost, low technology and low quality products.  Now Japanese and Korean cars are on par with their global more experienced competitor now, in both technology and quality, but they are also catching up on cost.Chinese vehicles will achieve the same and I believe, also in shorter timeframe than the Japanese and Korean car makers.One of the advantages that the Chinese car makers have is a sizeable domestic market, which both Korean and Japanese car makersdid not have. We have seen the progress the domestic car manufacturers have made in market share in a relatively short time, with some brands growing share very rapidly.  As local vehicle technology increases, the trend to increasing market share for domestic manufacturers will continue.  This will be helped by the own brand vehicles now being produced by the Chinese partners of foreign manufacturers.

7. As Chinese auto companies develop and strengthen their own internal engineering capacity, do you see a potential slow-down in demand for engineering services from companies such as Ricardo or other foreign companies.

Engineering capability is certainly the backbone of any automotive manufacturer and it is one area where Chinese companies have been spending significant resources and capital to upgrade.  The aim has been to produce products that are globally competitive not only on cost but also on technology. One of the key advantages of Ricardo is that we are very open and generous in sharing our technology and any IP that arises out of the projects that we carry out with our clients; in most cases, our client will also jointly own the IP.  This means that it is no longer Ricardo-only IP.  We view this as a positive motivator for us to be even more innovative in continuingly developing new technology through our advanced internal research and development, so as to always stay at the leading edge in providing technology for our customers’ future generation of vehicles.  Recently, we have supported a number of our Chinese clients in strengthening their own internal engineering capability. We have even established a new R&D centerfor one major Chinese client, SAIC Motor, operated the facility for them including hiring and training  staff for a period before eventually transferring operation of the R&D centre to the client. This is an example of our innovative approach to supporting Chinese clients in the most suitable way as they continue to develop.  Today we are still working on new programs with new technology with this same client.  In summary, the demand for our specialist engineering services will only slow down if we slow down, and we have no intention of slowing down. On the contrary, we will be speeding up our activity and capability locally to help more Chinese companies achieve global technology levels in the shortest possible time.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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“Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and its shareholders,” said Cain.

“As such, GM cannot support any of these proposed alternatives.”

Victor Muller still seems to think that GM’s support does not matter in this issue, he was quoted as saying “GM doesn’t have anything to say” by the Svenska Dagbladet, a Swedish daily newspaper. Under the proposed plan Youngman would not receive any shares in Saab which would keep it away from the technology that GM’s partners in Shanghai Auto currently use in their Buick range, but would allow Saab-Youngman to open a joint research and development center in the Netherlands.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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The last generation will be rocking 12 powertrains in China to give consumers the most, many buyers will opt for the basic 2.oTSI option but Audi are keen to offer a range of vehicles including a automatic and manual for the TSI, 2.8FSI in man or trans, 2.5TSI in FWD or Quattro, 3.0TFSI with S-Trinic Quattro, 2.0TDI with a man or trans, 3.0TDI with auto, and a hybrid 2.0TSI.

The old 2.7TDI engine has been nuked from this generation of Audi, although a 2.5TDI and a 3.0TDI have been introduced, it would be interesting to see how many diesel Audi’s were sold in China over the past few years, diesel has of course been in short supply across the country over the past two years. The new A6L will likely launch in the first quarter of 2012.

FrankF

Frank entered the automotive industry via his father's instructions. He grew up with cars around him, especially as his father was a major auto restorer, Frank's childhood was spent passing beers, tools and coffee to his father whilst he explained the ins and outs of engines. Frank now works in the Chinese car industry at a specific manufacturer.

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Reporters: Guangzhou Fiat will launch its first domestically produced cars in 2011. Facing such a fierce market competition, the growth rate is not satisfactory. Do you have any plan for it?

Jiang Ping: The first domestically produced model “C-Medium” will be put into production in July next year. The certified prototype vehicle trial was completed as planned on November 15. The car will be the direct competitor of “Focus”, “Jetta” and “Corolla” as the representative of mainstream midsize sedan market.

We know that if the performance price ratio is not high, there is no chance to win the market. Judging from the current situation, the performance price ration for C-medium ought to be prior to others. When officially put into mass production, the localization rate of C-medium will reach 90%, which will greatly reduce the production costs.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

The Emgrand EC7 was recently awarded a 4 star Euro NCAP crash test award that puts it on par with some of the more famous auto brands on the market in the UK, specifically the Jeep, Jaguar, Fiat and MG models which is a stark contrast to other Chinese models which routinely gained zero stars in crash tests organized by ADAC.

For the UK market Geely has teamed up with Manganese Bronze, the taxi manufacturer which also has a joint venture with Geely to develop and produce the TX range of cabs for the UK and international markets. TX4 cabs now roll off a Shanghai production line and are sent to the UK for final assembly and sales, which makes the TX4 one of the first Chinese cars sold in the UK in an ironic twist of fate.

Geely is aiming to set up a new style of dealer network which will see dealers becoming partners in the company and will have a greater say in which products Geely will bring to market rather than a stereotypical manufacturer-dealer relationship where new products are dictated down. Geely UK’s International Director, Matthew Cheyne, believes that Geely will offer the UK car market a different sort of car, initially the Emgrand EC7 will come with a 1.5L or 1.8L gasoline engine, and will retail in the £10,000 area when launched in a years time, Mr. Cheyne said “ We see Geely as an added value brand that will offer customers more than just a cheap car. The quality is good with Euro Ncap 4 star rating, we will offer a market leading customer care package and really listen to our dealers and customers. Geely won’t sell on price alone but will occupy the place in the UK market that has been vacated by other brands as they have moved up the price scale. We will be good value, good quality and no hidden extras or nasty surprises. Good honest quality and value and a brand that makes people feel valued and listened to.”

So what do UK consumers think of a Chinese car? According to Matthew early consumer feedback has been very positive “The early feedback has been uniformly good. “At the right price I would buy it.” People like the spaciousness you get from the larger car but at a smaller car price. Standard equipment is what they expect and the drive, ride and handling is comparable with all the competitors.”

Initially only the EC7 will be launched with a gasoline only engine but a diesel will likely come at a later date along with some of Geely’s other vehicles including the hatchback variant of the EC7 and probably some of Geely’s soon to launch MPV and SUV offerings.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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“A fundamental solution to the problem is to bring the school bus safety issue into the legal system, so as to attract people’s attention.” Premier Wen Jiabao said on the fifth national Conference on Women and Children, November 27th, “I asked the Legislative Affairs Office to work out School Bus Safety Regulations within a month.”

Only half month after this speech, Legislative Affairs Office of the State Council issued yesterday, School Bus Safety Bill (draft) yesterday, and aimed to seek public opinion from the whole society. The feedback will be considered before January 11, 2012. This quick reaction addressed the importance and urgency to solve the school bus safety issue through legislation, and also proves the priority of people livelihood issue.

The draft emphasis specially: School should use dedicated school bus to pick children and pupils. Professor Yuan Guilin from Beijing Normal University explained that the dedicated school bus are the ones in accordance with the provisions of the state’s school bus standard. It is different with the general vehicles; the design of the bus should be more consistent with the characteristics of child, and secure.

Overloaded School bus will be punished severely

The school buses failed to provide safety equipment ought to be corrected guided by the Public Security Traffic Control Department, and will have fines from 1,000 Yuan to 10,000 Yuan imposed as a penalty.

If the school has violations, such as not assigned people to take care for the whole ride, resulting in casualties of the student, the school will be responsible for the loss and directors who directly in charge and other directly responsible personnel shall be punished under the law.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

In accordance with the accounting method, domestic car companies are losing money overall. Meanwhile, the vast majority of people bear a pessimistic view about their long term prospect, obviously the domestic passenger car business is facing a critical moment. While for the joint-venture, the story is different. Not a long time ago, A joint venture between PSA and Changan logo just laid the cornerstone in Shenzhen, with 4 billion registered capital and 8.4 billion of initial investment, which marks the largest auto joint venture investment in China. In addition, Chery Automobile and Subaru’s joint venture is under negotiation.

Some expert claimed that，the government ought to suspend the approval of joint venture to protect local interests. However, this is impossible being a member of WTO and a historical retrogression. Moreover, it is not only domestic passenger car makers who are running in the red, many joint-venture brands are losing either. We cannot simply say the loss of domestic car is due to the pressure from joint venture. Conversely, joint venture’s entering into the domestic market leads to the development of auto parts and other related industries, contributes to the growth of national brands. It is a win-win model, rather than a zero-sum game.

The anonymous car experts mentioned above also said to the reporter of Security Times,that the reason of the decreasing behind is complex. First, the promotion policy to boost growth in 2009 and 2010 stopped in 2011, and there is no alternative policies afterwards; Second, Beijing Shanghai and Guangzhou issued restrictions on the car ownership, policies as Lottery Number of Purchasing Vehicles increase the car costs, making the joint-venture brands which are believed to be the synonyms of quality and secure even in greater demand; Finally, the first two years of fast developing make the national car makers focus on the expansion of production capacity ignoring the innovation and market analysis, thus in the winter of 2011, domestic enterprises should learn to review the history, instead of complaining about joint brand extrusion.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

This model is not likely to hit the market any time soon, in fact it might not be seen until 2013 although a Beijing Auto Show airing in April 2012 is not out of the question. The F3 is also likely to drop the F3 name in favor of an F5 moniker according to press reports and will also grow by 6cm giving the F5 (nee F3) a little more room in the back. Engine power will come from a 1.5T unit with turbos from either Borg Warner or Honeywell, and also a 1.8L naturally aspirated engine. The lack of a 1.6L engine indicates that BYD may not be so interested in catering to economy minded consumers that they were eager to please before.

BYD’s CEO, Wang Chuan Fu, is in the process of reorganizing the company to focus on quality rather than quantity, the F3 is likely to be one of the first cars to under go the Wang Treatment and will benefit from a better focus on quality levels.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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German tire manufacturer Continental, a world-leading auto parts provider, kicked off the construction of a two wheel tire plant in the eastern Chinese city of Hefei on Friday.

The plant, expected to be put into operation in December next year, will mainly manufacture tires for mountain bikes and racing bikes for China and some other Asian countries and regions, Constantin Batsch, head of Continental’s Two Wheel Tyre business group, said at the ground-breaking ceremony.

The new plant will be able to manufacture 1.7 million pieces of bike tires a year in its early stages, he said.

No further details, such as the amount of investment, were revealed.

The Hanover-headquartered company finished the construction of a plant producing passenger car tires in Hefei in May this year with an investment of 185 million euros ($240 million). It can manufacture 4 million pieces of tires a year in its early period, and the annual output will eventually hit 16 million.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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According to Passenger Car Manufacturers and Product Access Management Rules (draft) released in August 30, the new automobile production enterprises has to invest not less than 800 million RMB to build the product research and development institutions, and investment no less than 500 million RMB; total investment for new investment projects not less than 20 million RMB, of which its own funded passenger cars, heavy-duty truck investment projects should include engine production.

Chery’s joint venture with Jaguar Land Rover is essentially in line with the above requirements.

The real progress comes from Premier Wen Jiabao’s official visit to Britain, accompanied with the Zhang Ping, the director of National NDRC, and the person in charge of Chery Automobile.

In the first 10 months, Jaguar Land Rover sold more than 32,000 cars in China, increasing 60%, thus the completion of the annual sales target of 40,000 is just around the corner. From the sales volume, China is the world’s third largest market for Jaguar Land Rover. However, if put the capacity factors aside, this British car maker’s performance could potentially be stronger, consumers are waiting a long time for their car deliveries and the UK plants are overstretched.

In October, Chery and Jaguar Land Rover basically reached consensus on the content of cooperation and they both came to consult NDRC. A month later, both sides submitted a joint application, and are currently waiting for approval.

According to Ralf Speth, the CEO of Jaguar Land Rover CEO, once find a suitable partner, Jaguar Land Rover will start the plant construction immediately. Under the plan, Jaguar Land Rover will build a new factory with capacity of 5,000 employees, annual output of 50,000 cars. According to informed sources, the location of the plant will be in Chang Shu, Jiangsu Province as with the Qoros facility.

Chang Shu is located in the center of the Yangtze River Delta region, 1 hour’s drive from Shanghai, gathered around the 60% of China’s auto parts manufacturers and 93% of the mold equipment companies. The Southeast Economic Development Area of Chang Shu is located at the intersection of two highways, and it is the hub of logistics and transport. Ocean-going vessel and vessels in Yangtze River can dock in the port of Chang Shu.

More importantly, Chery has set its first joint venture “Qoros” in Chang Shu, which laid the foundation of Jaguar Land Rover’s enter to Chinese market.

According to Jaguar Land Rover’s product planning, it will launch 40 new models next five years, most of which will enter Chinese market. To meet the growing demand, Jaguar Land Rover is currently densely weaving network in China to team up with 100 dealers in the end of this year.

At the same time, Subaru which had been politely turned down by NDRC is still in the bargain.

Since the end of 2010, when Subaru Chery joint venture project has been established, Chery Automobile Sales Company sent a special team to do market analysis and forecast. In June, the joint venture project submitted to the NDRC. At the same time, Dalian base for Subaru project were under construction. But in August this year, the news of the NDRC declined Subaru’s joint venture became major news in media.

Insiders of Chery Automobile have said to the media, that Subaru is very stringent in the negotiation, so it will not approved by the NDRC, which aims to strengthen the power of speech for Chery. Thus, the Subaru left behind Jaguar Land Rover because of the stint of technology.

Recently, some media reported that Fuji Heavy Industries finally made concessions, agreeing to produce the models with Chery logo. In term of sales, Subaru will use the existing dealer network of Chery.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

According to the report of December 4^th of Reuters, Saab Automobile will be jointly held by a Chinese bank (not Bank of China) and Youngman Automobile, with holding shares less than 50%. Saab’s new ownership structure is that the Swedish car company SWAN holding 50.1%, Bank of China holding 29.9%, Youngman 19.9%. At the same time, Pangda has possibly been kicked out of the deal

On December 5^th, when the reporter went visit Wang Yin, the secretary of Pang Da group, to verify the Pangda leaving the news, Wang Yin was shocked. “We are only aware of this through media. No one has informed us.”

The market was worried about Pang Da’s performance after the failure, which was reflected in the stock price change. In GF Securities analyst Tang Jun’s view, it is not surprising after the General Motors intervened Saab Automobile equity transfer. In June, Pang Da Group and Youngman Automobile announced to buy 53.9% of the shares of Saab respectively, and to build joint venture car sales company and manufacturing company in China Moreover, to alleviate the urgent needs of Saab cars, Pang Da Group also paid 45 million Euros for the cars in advanced payment for cars they have not yet received.

However, on November 7, General Motors has said that if Saab Automobile accepted the aid program at the expense of the brand, the GM will cease to supply parts and products to Saab.

General Motors, sold Saab Automobile to Swedish Auto in early 2010 at the price of $400 million, GM received $74 million in cash, and was offered preferred stock to offset the balance. Also, the GM and Saab have signed a five year protocol to share vehicle, engine, supercharged, security and other key technology platforms (including the Phoenix platform), which means the GM strangles the throat of Saab.

Pang Da Group’s radical action not only lies the trail to takeover Saab in great risk, but also in setting up a new chain of ’4S dealerships’ at a time when the Chinese car market is going through a somewhat cold spell.

According to the third quarter report for Pangda, the third quarter net cash flow from operating activities is  21 billion, compared with 2.9 billion Yuan last year; the final net cash outflow from investing activities is 4.1 billion over last three quarter, increased $ 2.9 billion compared to last year.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

In the meantime, Mitsubishi has put a focus on its new joint venture with Guangzhou Auto Show which likely leaves SouEast out in the cold, therefore SouEast will have to focus more on its own self developed cars to win sales and market share in an age that is not entirely welcoming to local car manufacturers. SouEast showed off their V5 concept at the Shanghai Auto Show but nothing has been from the company until now, their new V5 has been spotted out road testing, early reports indicate that it carries a 1.8L engine capable of 144bhp possibly from the latest generation of Lancer. SouEast is apparently building V4 and V6 sedans to build a ‘V Range’ of vehicles which should debut in the next two to three years.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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Recently, a source close to Pang Da Group was quoted by the First Financial Daily, regarding the acquisition of Saab, Saab Automobile restructuring officer Guy Lofalk went to Detroit for a face to face talk with General Motors. The reporter was informed, that in the negotiations, GM insisted that the maximum holding equity of Saab Automobile for Chinese company maximum is 40%, giving both parties a 20% share in the company.

“To eliminate the threat posed by the Chinese companies to General Motors, we and the Youngman Auto raised a new ownership structure: reduced acquisition of equity.” An insider of Pang Da Group told the newspaper. Although Pang Da Group declined to tell anything about the equity figures, this means the impasse has finally begun to melt.

GM’s attitude has been very clear and strong: if the two Chinese companies acquire 100% stake in Saab, GM will refuse to provide spare parts and technology for future vehicles. Currently, GM owns the majority of Saab’s intellectual property rights and preferred stock. General Motors, sold Saab Automobile to Swedish Auto early 2010 at the price of $ 400 million, received $ 74 million in cash, and offered preferred stock to offset the balance. After Spyker, the predecessor of Swedish Auto bought  Saab, GM and Saab have signed a five year protocol to share vehicle, engine, turbo systems, security systems and other key technology platforms including the much coveted Phoenix platform.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

Qoros, with initial registered capital of 3.4 billion USD and a production base located in Changshu, R&D center in Shanghai, has an initial production capacity of 150,000 units.

Guo Qian, the Chairman of BoD and General Manager of Qoros said that, in the past 4 years, Qoros recruited and formed an international team dedicating to building cars that meet and exceed European standards.This is a shinning team. Apart from Guo Qian, who is the Deputy General Manager of Chery, Volker Steinwascher, Vice Chairman of BoD, was once the Vice Chairman of Volkswagen North America, the chief designer, Gert Hildebrand, was the Design Director of MINI. Moreover, Qoros has invited a large number of professionals in technique and management, all of which are big names in the automotive field. International talent is the backbone of Qorus, Guo Qian said, furthermore Qoros has different R&D resource, suppliers and sale channels, which are not shared with Chery.

According to reports, the first product will be a compact saloon, which it places against the Volkswagen Sagitar. In 2013, it will be on the market in China and Western Europe market simultaneously. Within two years after being put into production, Qoros will launch another three new products, including a hatchback, SUV and an electric car.

The main target users in China are urban consumers. Qoros believes that these urban consumers are interested in pursuing elegant products, excellent workmanship, a strong end user experience, and they cannot tolerate quality defects and even simple plagiarism. According to the plan, 40% of Qoros produced in China will export to overseas market.

Pierce Geng

Piece works for a major auto manufacturer by day and works part time for China Car Times. He was educated in the UK where he learned English to Chinese interpretation and is outspoken on the development of the Chinese car market.

On the other hand, China is becoming a major market for the Smart brand so the Forspeed could be introduced in the next couple of years as an imported vehicle, Smart vehicles were once scheduled to be produced in China but Chrysler-Daimler could not locate a suitable factory for the small car brand, although Qingdao was once touted as the perfect spot to kick start a mini car business.

Ash

Ash came to China at 18 on a whim and never left. Some 10 years later he collected a degree and a family along the way and now focuses his time on watching the Chinese car industry develop. He has witnessed the market change from being minor backyard market in to the world's biggest and most important market for all car manufacturers. You can contact or connect with him via Linkedin by clicking the 'Website' link.

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