SAIC to Make Own Auto Brand for Global Competition
One of China's leading auto manufacturers, Shanghai Automotive Industry Corporation, is investing billions of yuan to develop its own brand of vehicles for both the domestic and international auto markets, though currently the public is more familiar with the group's 2 joint ventures, one with Germany's Volkswagen and America's General Motors.
he new company under the group named SAIC Motor Manufacturing Company Limited, is the result of the group's 20 years' strategy to eventually produce self-designed cars for both domestic consumption and foreign export. The first phase of investment for developing its own brand of vehicles is expected to surpass 13.6 billion yuan, or 1.7 billion U.S. dollars by 2010.
Wang Xiaoqiu, general manager of the company summarized their process of development.
"The development process of SAIC included a self-development phase between 1950s and 1970s. Then came the period of cooperation with foreign investment. Now, a new era has come with the establishment of SAIC Motor, as we make use of international and domestic resources to develop our own brands."
The company's first self-branded model, a mid-to-high-end family car based on the Rover 75, has entered its final testing and is expected to make its debut by the end of this year.
SAIC Motor has set a sales target of 35 thousand units by 2007 and 200 thousand units by 2010, 22 percent of which will be sold abroad.
In comparison, SAIC's joint venture with General Motors, Shanghai GM, sold over 325 thousand cars last year, and Shanghai Volkswagen sold 287 thousand vehicles.
What is not clear yet is how much the new company will be battling with its parent company's two joint ventures for the same customers, as competition seems inevitable in the future.
The new company is also building a Research & Development Center in suburban Shanghai, with a planned investment of 1.8 billion yuan.
Backed with efficient capital and innovative technology, Wang Xiaoqiu revealed their ambition.
"Our short-term goal is to launch 30 models in all mainstream market segments in the coming 3 years, including a gas-electric engine hybrid. Prices of these cars will range from 65 to 300 thousand yuan to meet market demands at different levels."
The company intends to begin marketing in the UK in 2008, after forming a wholly owned sales company there next year.
Exports to Europe are expected to begin in 2007, and manufacturing plants will be set up in Europe and South America.
On the domestic front, 55 dealers on China's mainland have signed contracts to sell the cars, and 300 more are expected to join the network by 2010.
