SAIC Motor, FAW Group, and Dongfeng Motor Corp. Will Be Capable of Producing 7.8 Million a Year at the End of 2010

SAIC Motor, FAW Group, and Dongfeng Motor Corp. will be capable of producing 7.8 million a year at the end of 2010 In their future plans, SAIC Motor and FAW Group will have a production capacity of 3.7 million while Dongfeng Motor Corp. will have 3.9 million

Jan. 7, 2010 No.837

Index

SAIC Motor will increase its production capacity to 3 million a year at the end of 2010...
FAW Group will increase its production capacity to 2.3 million at the end of 2010, targeting to...
Dongfeng Motor Corp. will have a production capacity of 2.5 million a year at the end of 2010...

Collaborative report with IHS Global Insight

Mid-term Production Forecast

Executive Summary

In January-October 2009, production of vehicles in China amounted to 10.87 million. It is expected to reach 13 million-mark in full-year 2009 and 15 million-mark in 2010.

In January-October 2009, SAIC Motor (SAIC Motor Corporation Ltd.) produced 2,184,000, FAW Group (China FAW Group Corp.) 1,531,000, and Dongfeng Motor Corporation 1,480,000. The three companies' combined production volume is 5,195,000, which accounted for 47.8% of the total production volume in China.

The following outlines the production capacity plans that the three companies have announced so far. SAIC Motor's production capacity has already amounted to 2.5 million-mark a year and is planned to increase to 3 million-mark at the end of 2010. Then, the company intends to further increase the capacity to 3.7 million-mark.

FAW Group's production capacity has already reached 1.9 million-mark per year except for heavy-/medium-duty commercial vehicles. The company will boost the capacity to 2.3 million-mark at the end of 2010. Then, it intends to raise the capacity to 3.7 million-mark by enhancing own-brand mini vehicle business.

Dongfeng Motor Corp.'s production capacity has already amounted to 1.8 million-mark a year except for heavy-/medium-duty commercial vehicles. Its capacity will increase to 2.5 million-mark at the end of 2010. Then, as will FAW Group, it will expand its own-brand mini vehicle business, intending to boost the capacity to 3.9 million-mark.

■Production of passenger cars and production capacity by SAIC Motor, FAW Group, and Dongfeng Motor Corp.

Figures with "*" in front includes the production capacity for light-duty commercial vehicles.

		Production volume of passenger cars (in units)			Annual production capacity for passenger cars (in 1,000 units)
		2008	Jan.-Oct. 2008	Jan.-Oct. 2009	As of Oct. 2009	2010 plan	Future plan
SAIC Motor Passenger Vehicle Co.	Lingang (Shanghai) plant	28,830	21,219	69,337	120	150	300
	Yizheng (Jiangsu) plant	28,830	21,219	69,337	50	50	Production is discontinued
	Nanjing (Jiangsu) plant	9,447	7,291	11,824	n.a.	150	200
	Total	38,277	28,510	81,161	170	350	500
Shanghai VW	Shanghai three plants	494,178	429,657	568,335	600	800	960
	Nanjing branch plant	494,178	429,657	568,335	60	200	300
	Total	494,178	429,657	568,335	660	1,000	1,260
Former Nanjing Fiat Automobile		369	369	0	To be reorganized as Shanghai VW Nanjing Branch
Shanghai GM	Jinqiao (Shanghai) plant	240,885	199,584	319,328	320	320	450
	Norsom (Shenyang) plant	35,174	31,185	90,282	200	200	200
	Dongyue (Yantai) plant	163,054	144,714	124,110	240	240	300
	Total	439,113	375,483	533,720	760	760	950
SAIC-GM-Wuling Automobile	Liuzhou western plant	587,774	498,279	827,113	*400	*400	*400
	Liuzhou eastern plant				*200	*200	*300
	Qingdao branch plant				*300	*300	*300
	Total	587,774	498,279	827,113	*900	*900	*1,000
Former Nanjing Automobile Group Wuxi Soyat Branch		32	32	0	Rebuilding of the plant is currently under consideration
SAIC Motor Corp. total		1,559,743	1,332,330	2,010,329	*2,490	*3,010	*3,710
FAW Car	Former (Hongqi) plant	127	111	271	10	10	10
	The first new plant	113,220	94,237	149,231	200	200	200
	The second new plant	Operations of the Hongqi/Besturn brand plant will partially begin in 2010					200
	Total	113,347	94,348	149,502	210	210	410
Tianjin FAW Xiali Automobile		172,369	147,770	169,703	200	200	200
Tianjin FAW Huali Automobile		Production will be resumed by 2011					150
FAW Jilin Automobile		22,943	20,652	40,411	*100	*100	*300
Tianjin Tianqi Group Meiya Auto		1,073	865	873	*40	*40	*40
Tianjin FAW Toyota Motor	The first line(Tianjin)	91,781	82,200	73,106	120	120	120
	The second line (Tianjin)	95,763	83,894	58,610	100	150	150
	The third line (Tianjin)	178,112	151,728	113,308	200	200	200
	Total	365,656	317,822	245,024	420	470	470
Sichuan FAW Toyota Motor	Chengdu existing plant	13,741	12,581	8,557	10	To be relocated to a new plant
	Chengdu new plant	Construction began in 2008				30	50
	Changchun Fengyue plant	6,055	5,261	1,458	10	10	10
	Changchun new plant	Construction will be resumed in 2010				100	200
	Total	19,796	17,842	10,015	20	140	260
FAW-VW	Changchun Audi plant	Operations start in 2009		538,575	200	200	200
	The first (Changchun) plant	480,822	420,084		150	150	150
	The second (Changchun) plant				330	330	330
	Chengdu existing plant				20	30	50
	Chengdu new plant	Construction begins in 2009				150	350
	(Guangdong prov. plant)	Under consideration as a compact-car plant					200
	Total	480,822	420,084	538,575	700	860	1,280
FAW-GM Light Duty Commercial Vehicle	Yunnan existing plant	1,592	1,100	887	*150	*150	*150
	Yunnan new plant	Details for progress are unknown					*200
	Harbin plant	Produces minivans and light-duty trucks			*80	*100	*200
	Total	1,592	1,100	887	*230	*250	*550
FAW Group total		1,177,598	1,020,483	1,154,990	*1,920	*2,270	*3,660
Dongfeng Motor Passenger Vehicle		Production begins in 2009		12,450	160	160	330
Dongfeng Liuzhou Motor		19,362	17,258	19,069	50	50	60
Dongfeng Yu'an Automobile	Chongqing plant	74,255	59,709	111,872	*100	*100	*100
	Shiyan existing plant	74,255	59,709	111,872	*85	*85	*100
	Shiyan new plant	Construction begins in 2009				*100	*100
	Wuhan plant	To be acquired from former Wuhan Zhongyu Automobile				*100	*200
	Total	74,255	59,709	111,872	*185	*385	*500
Dongfeng Automobile		Planning to enter the mini vehicle market				*20	*260
Dongfeng Nissan Passenger Vehicle Co.	The first (Guangzhou) line	292,823	233,180	327,752	460	460	360
	The second (Guangzhou) line	Operations will begin in 2012					240
	Hubei Xiangfan plant	61,284	50,137	82,692	100	100	100
	Total	354,107	283,317	410,444	560	560	700
Dongfeng-Renault Passenger Car project		A joint venture plan is said to be have been resumed in 2009
Zhengzhou Nissan Automobile	The first plant	15,359	12,360	12,572	*86	*86	*86
	The second plant	Operations will begin in spring of 2010				*120	*200
	Total	15,359	12,360	12,572	*86	*206	*286
Dongfeng Yulon Motor (Hangzhou Joint Venture)		Construction began in 2008. Currently Awaiting approval for production.				120	240
Dongfeng Honda Automobile	Wuhan existing plant	165,295	136,045	166,230	200	240	240
	Wuhan new plant	Operations are expected to start partially in 2011					240
	Total	165,295	136,045	166,230	200	240	480
Dongfeng Puegeot Citroen Automobile	The first (Wuhan) plant	172,720	156,761	201,283	300	300	300
	The second (Wuhan) plant	Operations begin at the end of 2009				150	300
	Total	172,720	156,761	201,283	300	450	600
Dongfeng Yueda Kia Motors	The first (Yancheng) plant	139,067	119,115	181,543	130	130	130
	The second (Yancheng) plant	139,067	119,115	181,543	130	200	300
	Total	139,067	119,115	181,543	260	330	430
Dongfeng Motor Corp. total		940,165	784,565	1,115,463	*1,801	*2,521	*3,886
The three Groups total		3,677,506	3,137,378	4,280,782	*6,211	*7,801	*11,256

■SAIC Motor will increase its production capacity to 3 million a year at the end of 2010, targeting to sell 4 million in 2014

In November 2009, SAIC Motor announced that it has set the 2014 production capacity target for 4 million (It expects to sell 2.65 million in 2009). Among them, it targets to sell 500,000 passenger cars under its own Roewe/MG brand by 2015.

The company's production capacity has already amounted to 2.5 million and will expand to 3 million at the end of 2010. Then, the company intends to boost the capacity further to 3.7 million.

■SAIC Motor Passenger Vehicle will build up a production capacity for 300,000 own-brand passenger cars a year in 2010

SAIC Motor Passenger Vehicle (SAIC Motor Corp. Ltd. Passenger Vehicle Co.) considers its Lingang (Shanghai) plant as a general plant for passenger cars under its own Roewe and MG brands and for engines and its Nanjing (Jiangsu) plant as a compact car plant for its own-brand A-class passenger cars and for compact engines.

The company plans to launch gradually 19 new models during the five years to 2013. It will boost the combined production capacity of the two plants from the current 170,000 to 350,000 a year by the end of 2010, then further to 500,000 (It plans to transfer the production at its Yizheng (Jiangsu) plant (Jiangsu prov.), core plant, to its Lingang (Shanghai) plant).

■The Lingang (Shanghai) plant started operations in September 2008, planning to boost the capacity to 150,000 a year by the end of 2010

The Lingang (Shanghai) plant, which is currently under construction in the suburbs of Shanghai, started operations in September 2008 and began production of Roewe 550 3box. It has a production capacity for 120,000 a year, which is planned to be boosted to 150,000 by the end of 2010, when the first-stage construction will be completed. The company plans to further increase the capacity to 300,000 in the second-stage construction (The production capacity for engines is 400,000 a year).

The company plans to transfer production of Roewe 750 3box from the Yizheng (Jiangsu) plant in Jiangsu prov. (which is capable of producing 50,000 a year) to the Lingang (Shanghai) plant. It also plans to add production of MG brand vehicles that share the same platform with Roewe 550 and alternative energy vehicles including HEVs/EVs.

■The Nanjing (Jiangsu) plant plans to increase its production capacity to 150,000 a year at the end of 2009 and further to 200,000

The Nanjing (Jiangsu) plant (former plant of Nanjing MG Automobile) plans to complete the second-stage construction at the end of 2009 (which began in October 2008. The investment is worth RMB2.6 billion). Its production capacity will be boosted to 150,000 a year. In addition, the company plans to increase the capacity further to 200,000 a year (The production capacity for engines is 250,000 a year). The immediate production models are four models with 1.3-1.6L displacements including MG and Roewe brand models that share the same platform and A-class world car AP11.

(Note)

SAIC Motor is said to be considering rebuilding Nanjing Automobile Group's former Wuxi passenger car plant (Nanjing Automobile Group Wuxi Soyat), which it made into its subsidiary, as a plant that would produce Istana, which would be transferred from the Yizheng small bus plant, or that would produce Iveco's light-duty commercial vehicles.

■Shanghai VW will build up a production capacity of 1 million a year in 2010 and then will increase further to 1.3 million

Shanghai VW (Shanghai Volkswagen Automotive Co., Ltd.) plans to increase the production capacity of its three plants in Shanghai to more than 800,000 a year by 2010 and further to 960,000. A combined total with the Nanjing branch plant will be approximately 1 million by the end of 2010 and then 1.3 million. VW (including a tie-up with FAW Group) plans to invest 4 billion Euros in the expansion of its annual production capacity and the launch of new models in China by 2011 (announced in September 2009).

■The production capacity of the Nanjing branch plant will be boosted to 200,000 a year by 2010 and to 300,000 by 2012

Shanghai VW will increase the production capacity of its Nanjing branch plant (non- independent corporation), which started operations in April 2008, from the current 60,000 to 200,000 by 2010, and further to 300,000 by 2012 (announced in August 2009). The Nanjing branch plant is the former Nanjing Fiat Automobile. Its current production model is Santana Vista, production of which was transferred from the Shanghai main plant.

■Shanghai GM and SAIC-GM-Wuling Automobile will increase their combined production capacity to 1.76 million a year by 2011

SAIC Motor and GM will boost the total production capacity of Shanghai GM (Shanghai General Motors Co., Ltd.) group and SAIC-GM-Wuling Automobile (SAIC-GM-Wuling Automobile Co., Ltd.) from the current 1.5 million a year to 1.76 million by the end of 2011. (Details of the progress are unknown regarding the plan to increase the production capacity of the Jinqiao (Shanghai city) main plant to 450,000 and that of the Yantai (Shandong prov.) plant to 300,000 in 2011 or later.)

(Note) 1.	In December 2009, SAIC Motor announced that it would acquire a 1% stake in Shanghai GM, which it equally owned with GM, for more than USD84.5 million. At the same time, it also unveiled that it would establish with GM an equally-owned investment company, SAIC General Motors Investment Limited, in Hong Kong.
2.	The new company plans to cultivate the emerging markets in Asia. First, it is said to be considering producing and marketing compact cars of Shangahi GM and SAIC-GM-Wuling Automobile in India by utilizing GM's business in India.

■Shanghai GM's Shenyang new plant started operations, boosting production capacity to 760,000 a year

In December 2008, Shanghai GM started operations of the new plant of Shanghai GM Norsom (Shanghai GM (Shenyang) Norsom Motors Co., Ltd.), thereby boosting the group's production capacity to 760,000 a year. The 760,000 are broken down to 200,000 by Shanghai GM Norsom, 320,000 by Shanghai GM's Jinqiao main plant, and 240,000 by the Yantai (Shandong prov.) plant - Shanghai GM Dongyue (Shanghai GM Dongyue Motors Co., Ltd.).

Shanghai GM Norsom's Shenyang new plant produces Buick Cruze. It is capable of producing 150,000 a year. GM considers the plant as its global compact passenger car plant. The total investment in the new plant is worth RMB2.67 billion (Construction began at the end of 2005). Along with its existing plant, Shanghai GM Norsom has a combined production capacity of 200,000 a year (2 shifts).

■SAIC-GM-Wuling Automobile will boost production capacity of mini vehicles to 1 million a year by 2011

SAIC-GM-Wuling Automobile will boost the production capacity of its Liuzhou eastern plant (Guangxi Zhuang Autonomous Region) from 200,000 to 300,000 a year by 2011 (Along with the expansion of the production capacity of engines by 150,000, construction began in August 2009. The total investment is worth RMB2.1 billion). The combined production capacity of the Liuzhou plant with 400,000 of the western plant will increase to 700,000 a year. SAIC-GM-Wuling Automobile's combined production capacity for mini trucks and minivans with 300,000 of the Qingdao branch plant (Shandong prov.) will total 1 million.

(Note)

The Qingdao branch plant bought a light vehicle plant that was under the umbrella of FAW Group in 2005. It added an engine plant to the plant in 2007 and made it a production base in northeastern China, which started production of Wuling Rongguang series in April 2008. Its production capacity was increased from the initial 68,000 a year to 200,000. It is said to be 300,000 at the end of 2009.

■FAW Group will increase its production capacity to 2.3 million at the end of 2010, targeting to sell 4 million in 2015

FAW Group targets to sell 2 million including commercial vehicles in 2010 (which includes 1 million own-brand vehicles), 3 million in 2012 (which includes 1.6 million own-brands), and more than 4 million in 2015.

The company has already had a production capacity of 1.9 million a year excluding heavy-/medium-duty commercial vehicles. It will increase the capacity to 2.3 million at the end of 2010. Then, it will enhance its own-brand mini vehicle business, intending to boost the capacity further to 3.7 million.

■FAW Group targets to produce 800,000 own-brand passenger cars including mini vehicles a year by 2012
■FAW Car will boost its production capacity for passenger cars to 400,000 a year by 2012

In October 2009, FAW Car in the FAW Group increased the production capacity of its first passenger car new plant in Changchun, which conducts mixed production of Besturn B70/B50 in its own-brand Besturn series and Mazda 6 (Japanese name: Atenza), by 40,000 to 200,000 a year. The special Hongqi-brand plant (the former eastern plant), which produces models such as HQ3, is capable of producing 10,000 a year.

In September 2008, FAW Car started construction of its new second plant, which it considers a special plant for its own-brand vehicles, in the adjacent site of its first new plant. The second plant initially has a production capacity of 100,000 a year and will start operations by 2010. It plans to boost the capacity to 200,000 by 2012.

■Tianjin FAW Xiali Automobile will build up a production capacity of 350,000 a year by 2012

Tianjin FAW Xiali Automobile (Tianjin FAW Xiali Automobile Co., Ltd.) currently has a production capacity of 200,000 a year and targets to produce and sell 350,000 in 2012. In October 2008, the company started upgrading a plant of Tianjin FAW Huali Automobile (Tianjin FAW Huali Automobile Co., Ltd.) in order to build up a production capacity of 350,000 (The total investment is worth approximately RMB1,598 million). It will resume production at Tianjin FAW Huali Automobile by 2011 and will mainly produce own-brand A-class compact passenger cars. Tianjin FAW Xiali Automobile plans to boost its production capacity to 150,000 a year by 2012 (announced in June 2009).

(Note) 1.	In April 2008, Tianjin FAW Xiali Automobile made Tianjin FAW Huali Automobile into its wholly-owned subsidiary. Their plants are located adjacently.
2.	Tianjin FAW Xiali Automobile had planned to build a plant in Mexico which would be capable of producing 50,000 a year, but announced to postpone the plan in June 2009.

■FAW Jilin Automobile plans to produce and sell 200,000-250,000 mini vehicles in 2012

In October 2009, FAW Group announced its plan to enhance production and marketing of its own-brand mini vehicles (including minivans and mini trucks) centered on FAW Jilin Automobile (FAW Jilin Automobile Co., Ltd.). FAW Jilin Automobile plans to produce and sell 200,000-250,000 mini vehicles in 2012 (It plans to reach Top 3 mini vehicle manufacturers) and started to expand its plant in Jilin prov. in October 2009 (The current production capacity is 50,000 MPVs a year).

(Note) 1.	In 2008, FAW Group set up an R&D division for mini vehicles at its group's development center, FAW Technical Center.
2.	In June 2009, FAW Group, FAW Jilin Automobile, and Daihatsu announced that they would switch the brand of compact MPV Senya (Daihatsu Xenia), which FAW Jilin Automobile produces, from Daihatsu to FAW (The companies continue the current technical licensing contract and their cooperation).

■In its partnership VW, FAW Group will build up a production capacity of 850,000 a year at the end of 2010 and more than 1 million in 2012

FAW-VW (FAW Volkswagen Automotive Co., Ltd.), which is a joint venture between FAW Group and VW, boosted the combined production capacity of the Changchun plant (3 sites) in Jilin prov. and the Chengdu branch plant (1 site) in Sichuan prov. to 700,000 a year (including 200,000 for Audi brand vehicles). In addition, the company started construction of its Chengdu new plant, which is planned to be capable of producing 350,000 a year in 2012 (It will have a production capacity of 150,000 a year in the first-stage construction at the end of 2010). It is also said to be considering building a new compact car plant that is capable of producing more than 200,000 a year in South China area.

■FAW Group started construction of a new plant in Chengdu, Sichuan prov., which will be capable of producing 350,000 in 2012

In May 2009, FAW Group announced that it had started construction of a new plant of FAW-VW Chengdu Branch (non-independent corporation). The new plant plans to have a production capacity of 150,000 at the end of 2010 (The total investment in the first-stage construction is worth RMB5 billion) and of 350,000 in 2012. The predecessor of Chengdu Branch is the former Chengdu FAW Automobile Co., Ltd., which FAW-VW bought in March 2009. The former Chengdu FAW Automobile produced FAW-VW's Jetta by commissioning for the west China area including Sichuan prov. starting in July 2007.

■The Changchun new plant, which assembles Audi brand vehicles, started operations, capable of producing 200,000 a year

In September 2009, FAW-VW completed the construction of a new assembly plant in Changchun for Audi brand vehicles (The construction began in June 2008. The total investment is worth approximately RMB1 billion). The company transferred production of Audi brand vehicles completely from the existing Changchun plant and started production. With the start of operations of the new plant, FAW-VW's production capacity of Audi brand vehicles increased from 100,000 to 200,000 a year. The new plant is capable of mixed production of four models. For the time being, it produces the new A4L and the Q5 (SUV), which will be released in the near future, planning to add their derivative models.

(Note)

In June 2008, Audi announced its business strategy in China, in which it would increase the number of dealers to more than 210 by 2012 and would target to sell 200,000 in 2015.

■FAW-VW is considering constructing a new A0-class compact car plant that is capable of producing more than 200,000 a year in South China area

It is said that FAW-VW is currently considering building a new plant that will produce more than 200,000 A0-class compact passenger cars centered on SEAT models in Zhujiang Delta region in South China area. Locations such as Shunde, Dongguan, and Nanhai (Foshan city) in Guangdong prov. are said to be likely candidates. It is also said that a tie-up with Foday Automobile in Nanhai city is likely.

■In its partnership with Toyota, FAW Group will build up a production capacity of 470,000 a year in Tianjin city by 2011 and of 130,000 in Chengdu city and Changchun city

FAW Group will boost its production capacity in a joint venture with Toyota from 440,000 to 610,000 by 2011. In 2010, the company will introduce new Crown (which was lined off in December 2009) in Tianjin FAW Toyota Motor and new Prius in Sichuan FAW Toyota Motor.

■Tianjin FAW Toyota Motor will increase its production capacity to 470,000 at the end of 2009

Tianjin FAW Toyota Motor (Tianjin FAW Toyota Motor Co., Ltd.), a joint venture with Toyota, will boost its production capacity of the second line (Tianjin) from 100,000 a year to 150,000 by the end of 2009 (The expansion work began in May 2008). Combined with 120,000 of the first line (Tianjin) and 200,000 of the third line (Tianjin), Tianjin FAW Toyota Motor's production capacity will increase to 470,000 a year.

■Sichuan FAW Toyota Motor will have a production capacity of 140,000 a year in Chengdu city and Changchun city by 2011

Sichuan FAW Toyota Motor (Sichuan FAW Toyota Motor Co., Ltd.), a joint venture with Toyota, will transfer its production business from Chengdu city to its new plant by the first half of 2010. The new plant is capable of producing 30,000 a year. The existing plant is capable of producing 10,000 SUVs (Land Cruiser Prado) and 3,000 chassis for buses (Coaster). (It is reported that the new plant plans to boost the production capacity to 50,000 a year in the future)

The construction of Changchun new plant began in October 2008, but was currently suspended. It is expected to be resumed in 2010. The new plant will be capable of producing 100,000 a year (There is also an existing plant of Changchun Fengyue Co., which is capable of producing 10,000 a year) and is planned to start operations by March 2011 (Operations may begin as early as at the end of 2010). The company announced New Corolla (Kaluola) as a production model at the announcement when the construction began. Yet, RAV4, an SUV that is enjoying strong sales, is also said to be a likely candidate. (It is also reported that the new plant plans to boost its production capacity to 200,000 a year in the future)

■FAW Group ties up with GM on the light-duty commercial vehicle business, planning to build up a production capacity of 250,000 in 2010

In August 2009, FAW Group and GM jointly established FAW-GM Light Duty Commercial Vehicle (FAW-GM Light Duty Commercial Vehicle Co., Ltd.), a 50-50 joint venture that produces and sells light-duty commercial vehicles (LCV), in Changchun city, Jilin prov.

The new company incorporates the business of the two companies in the FAW Group, FAW Group Harbin Light Duty Truck (FAW Group Harbin Light Duty Truck Co., Ltd.) and FAW-Hongta Yunnan Automobile (FAW-Hongta Yunnan Automobile Co., Ltd.), planning to expand its LCV business globally under the two brands - FAW Group and GM. The new company has not announced a plan to build a new plant. It says that it targets to produce and sell 200,000 in 2010. In 2009, the two companies in the FAW Group announced a plan to construct a new plant.

■FAW Group Harbin Light Duty Truck will build a new plant that is capable of producing 100,000 a year and that is scheduled to start operations at the end of 2010

In June 2009, FAW Group Harbin Light Duty Truck started construction of a new plant in Harbin city, to which the company will transfer production from the existing plant. The new plant will be capable of producing 100,000 a year (The existing plant is capable of producing 80,000 a year). The total investment is worth RMB142,300. It is scheduled to start operations in December 2010, planning to boost the production capacity to 200,000 a year in the future.

(Note)

FAW Group Harbin Light Duty Truck is the former FAW Group Harbin Light Duty Truck Factory. It was renamed in March 2009.

■FAW-Hongta Yunnan Automobile currently has a production capacity of 150,000 a year and is planning to build a new plant that is capable of producing 200,000 a year

In February 2009, FAW-Hongta Yunnan Automobile announced that it would build a new plant in Yunnan prov., where it currently owns a plant and that, in the first-stage construction, it would build up a production capacity for 200,000 LCVs. The existing Yunnan plant is currently producing minivans (Lucky Messenger), MPVs (Free Wind), mini trucks (Hongta), and light-duty trucks (including Jiefang, Qilin, and Balin). It is capable of producing 150,000 a year.

■Dongfeng Motor Corp. will have a production capacity of 2.5 million a year at the end of 2010, planning to boost the capacity further to 3.9 million in the future

Under its five year plan from 2008 to 2012, Dongfeng Motor Corp. (Dongfeng Motor Corporation) targets to sell a total of 1.8 million - 1.35 million passenger cars (including 270,000 own-brand cars) and 450,000 own-brand commercial vehicles - in 2010 (announced in December 2007).

The company has already build up a production capacity of 1.8 million a year excluding heavy-/medium-duty commercial vehicles and will boost the capacity to 2.5 million at the end of 2010 (Under its five-year medium-term plan, the company planned to have a total production capacity of 2.15 million a year in 2010 - 1.63 million passenger cars and 520,000 commercial vehicles). Then, as will FAW Group, it will enhance its own-brand mini vehicle business, intending to boost the capacity to 3.9 million.

■Dongfeng Motor Corp. started producing own-brand Fenshen passenger cars, planning to expand its mini vehicle business
■Dongfeng Motor Passenger Vehicle began production of Fenshen brand passenger cars, capable of producing 160,000 a year

Dongfeng Motor Passenger Vehicle (Dongfeng Motor Corp. Passenger Vehicle Co.) takes charge of the own-brand Fenshen passenger car business. It completed the first-stage construction of its Wuhan new plant in Hubei prov. at the end of 2008 (The construction began in September 2007), starting production of Fenshen S30 3box in June 2009. The new plant has a production capacity of 160,000 a year, which is planned to be increased to 330,000 in the second-stage construction.

(Note)

Dongfeng Motor Corp. was founded in August 2008 based on the former Dongfeng Motor Corp. Passenger Vehicle Division as a founding body. In May 2009, it became a wholly-owned subsidiary of Dongfeng Motor Group Co., Ltd., which is Dongfeng Motor Corp.'s asset management company.

■Dongfeng Yu'an Automobile will build up a production capacity for 200,000 mini vehicles a year in Shiyan city and for 200,000 mini passenger cars a year in Wuhan city

In June 2009, Dongfeng Yu'an Automobile (Dongfeng Yu'an Automobile Co., Ltd.) started construction of its new mini vehicle plant in Shiyan city, Hubei prov. (The total investment is worth RMB650 million). Operations are scheduled to begin at the end of 2009. The production capacity will be 100,000 a year in 2010. The company is currently expanding the existing Shiyan plant (that is capable of producing 85,000 a year), which produces mini vehicles. The Shiyan plant will have a production capacity of 100,000 a year by 2011.

In September 2009, the company bought the Dunkou plant (Wuhan city), which was capable of producing 100,000 a year, from a private auto manufacturer, Wuhan Zhongyu Automobile. It plans to make the plant into a production plant for mini passenger cars with displacement of 1.3L or under, which are priced at RMB30,000 to 100,000. The production capacity will gradually be increased to 200,000.

(Note)

Dongfeng Yu'an Automobile is owned 50% by Dongfeng Motor Group Co., Ltd. and Dongfeng Motor Industrial, and 50% by Chongqing Yu'an Chuangxin Science & Technology.

■Dongfeng Automobile enters the mini vehicle market, targeting to produce and sell 20,000 in 2014

Dongfeng Automobile (Dongfeng Automobile Co., Ltd.) is a subsidiary of New Dongfeng Motor (Dongfeng Motor Co., Ltd.: DFL), which is equally-owned by Dongfeng Motor Corp. and Nissan. Dongfeng Automobile produces light-duty commercial vehicles (LCV). In November 2009, it announced its intention to enter the mini vehicle market to produce and sell 200,000 mini vehicles in 2014 (No details of the plan are unveiled).

■In its tie-up with Nissan, Dongfeng Motor targets to sell 1 million including light-duty commercial vehicles (LCV) in 2010, two years earlier

New Dongfeng Motor (DFL), which is equally-owned by Dongfeng Motor Corp. and Nissan, targets to sell 1 million in 2010 two years earlier than its initial target of 2012 (announced in December 2009. It includes light-duty commercial vehicles and import cars). In addition, Dongfeng Motor Corp. is planning joint production with Yulon Motor in Hangzhou (The production capacity is 240,000 a year including SUVs and MPVs) and is also negotiating with Renault on joint production in Guangzhou.

(Note)

Under its five-year medium-term plan to 2012, Plan 13 (Plan One Cubic), New Dongfeng Motor (DFL) had targeted to sell a combined total of 1 million passenger cars of Dongfeng Nissan Passenger Vehicle and light-duty commercial vehicles (LCV) of Dongfeng Automobile and Zhengzhou Nissan Automobile in 2012 (announced in May 2008).

■Dongfeng Nissan Passenger Vehicle will add a second production line to its Guangzhou main plant, gradually increasing the production capacity to 700,000

In July 2007, New Dongfeng Motor (DFL) announced that it would gradually increase the production capacity of Dongfeng Nissan Passenger Vehicle's Guangzhou main plant from the current 360,000 to 600,000 (The Xiangfan branch plant is capable of producing 100,000 a year). The company will invest a total of RMB5 billion to add a second production line. Operation of the second production line will begin in 2012, which will mainly produce low-priced strategic models.

(Note)

In the autumn of 2009, Dongfeng Nissan Passenger Vehicle introduced three-shift production for 460,000 in order to boost production for the near term at the Guangzhou main plant.

■Zhengzhou Nissan Automobile will start operations of its second plant in 2010, increasing its production capacity for LCVs to 200,000 a year

In September 2008, Zhengzhou Nissan Automobile (Zhengzhou Nissan Automobile Co., Ltd.) began construction of its second plant in Zhengzhou city. The new plant will have a production capacity of 120,000 a year when the first-stage construction is completed. The investment is worth RMB1 billion. The new plant will start operations by May 2010 and plans to produce Nissan NV200 (Mini Van). Combined with the existing plant, Zhengzhou Nissan Automobile's production capacity will increase to 206,000.

(Note) 1.	In March 2009, Zhengzhou Nissan Automobile announced its sales target - 60,000 in 2009, more than 100,000 in 2010, and more than 200,000 in 2012.
2.	In November 2009, Zhengzhou Nissan Automobile started marketing of Nissan LCV (NT400 Cabstar. Japanese name: Atlas), which the Xiangfan branch plant of Dongfeng Automobile, its parent company, produces (Monthly sales target is 1,700).

■Dongfeng Automobile started construction of its new LCV plant in Xiangfan, planning to increase the production capacity to 60,000 a year by 2014

In March 2009, Dongfeng Automobile started construction of a new light van plant (Dongfeng Automobile Co., Ltd., Xiangfan Light Vehicle Co.) in Xiangfan, Hubei prov. The company will complete the first-stage construction for a production capacity of 20,000 a year by 2010, planning to increase the capacity to 60,000 in 2014 (The total investment is worth approximately RMB1.75 billion). The new plant is planned to be a special plant for Dongfeng Automobile's strategic light van, A08 (development code) (A08 is a monocoque middle-class/high-end LCV that Dongfeng Motor independently develops based on Nissan model).

■Dongfeng Motor plans new joint production with Yulon Motor while it is negotiating joint venture with Renault
■Dongfeng Yulon Motor plans to build up a production capacity of 240,000 a year in Hangzhou jointly with Yulon Motor

In September 2009, Dongfeng Motor Corp. announced that it had submitted to the National Development and Reform Commission a plan in which it would reorganize Dongfeng Hangzhou Motor Co., Ltd., which produces middle-class/high-end buses, and would jointly establish a new company that would manufacture commercial vehicles and passenger cars with Yulon Motor and Zhongyu Holding Group (Dongfeng Hangzhou Motor has a production capacity for 30,000 buses a year)

In June 2009, the three companies concluded an agreement on Dongfeng Hangzhou Motor taking a 20% stake in Luxgen (Hangzhou) Automobile (Luxgen (Hangzhou) Automobile Co., Ltd.), an equally-owned joint venture between Yulon Motor and Zhongyu Holding Group. In August 2009, Luxgen (Hangzhou) Automobile was renamed as Dongfeng Yulon Motor (Dongfeng Yulon Motor Co., Ltd.).

In December 2008, Luxgen (Hangzhou) Automobile started construction of a new plant in Hangzhou city which produces passenger cars under Yulon Motor's Luxgen brand, but it had not won approval for production from the Chinese government. The three companies reached an agreement to resolve this situation.

The new plant is capable of producing 240,000 a year (120,000 when operations start) and of 200,000 engine. Operations will start as early as in October 2010. It plans to produce Luxgen-brand SUVs (2.0L), MPVs, and Cars (2/3box). There is also a plan to build an engine plant and an R&D center attached to the new plant. The total investment is worth RMB4.65 billion (RMB3.4 billion for the first-stage construction).

■Dongfeng Motor negotiates joint venture with Renault, considering building a new joint venture plant in Guangzhou while it is also eying reorganization of Sanjiang Renault Automotive

Dongfeng Motor Corp. and Renault are said to have resumed their negotiation on joint production. It includes the reorganization of Sanjiang Renault Automotive (Sanjiang Renault Automotive Co., Ltd.), in which Renault holds a 49% stake. Renault will initially conduct mixed production of Renault models on the production line for Nissan models at Dongfeng Nissan Passenger Vehicle's Guangzhou main plant. Renault is said to intend to build a new plant in Huadu District, Guangzhou city, to expand its joint venture with Dongfeng Motor Corp.

(Note) 1.	In June 2008, Renault announced its intention to resume production at Sanjiang Renault Automotive in 2010. The company will make an additional investment of RMB1.5 billion to prepare a production capacity for 40,000 units of Mini Van W72 (development code) and to export the product to emerging markets such as Brazil, India, and Russia.
2.	Sanjiang Renault Automotive was established as a joint venture between Renault and Sanjiang Space Estate Industry Group in 1994. Due to slumping business, it halted production in 2002 (It had produced a total of 4,000 including Mini Van Trafic). Its rebuilding plan through a tie-up with China Brilliance Automotive was once sought.

■Dongfeng Honda Automobile will double its production capacity to 240,000 a year, also planning to build its second plant

In August 2009, Dongfeng Honda Automobile (Dongfeng Honda Automobile Co., Ltd.), which is equally owned by Dongfeng Motor Corp. and Honda, raised the production capacity of its Wuhan plant (existing plant) from 120,000 a year to 200,000 at the same time when volume-production of high-end midsize sport sedan, Spirior (based on SR-9 concept), began. The company says that it will further increase the capacity to 240,000 by the beginning of 2010.

Dongfeng Honda Automobile is also planning to build its second plant (new plant), which is capable of producing 240,000 a year, in the adjacent site of its Wuhan plant (existing plant) (The initial production capacity is 120,000 a year). In September 2009, the company already won approval for land use and will begin the construction, when it wins approval from the Chinese government, as early as in March 2010. Operations will partially start in 2011, when it will introduce new Civic. Full-scale production is expected to begin in 2012. It is said that production of Dongfeng Honda Automobile's own-brand vehicles will be added.

■Dongfeng Peugeot Citroen Automobile started operations of the second plant in Wuhan and has increased its production capacity to 450,000 a year

Dongfeng Peugeot Citroen Automobile (Dongfeng Peugeot Citroen Automobile Co., Ltd.) is a joint venture company between Dongfeng Motor Corp. and PSA. In November 2009, it completed the first-stage construction of the second (Wuhan) plant (Passenger Vehicle plant) in Wuhan city, starting volume-production of Citroen C5. The new plant is capable of producing 150,000 a year (which is said to be increased to 300,000 in the future). Combined with 300,000 of the first (Wuhan) plant (Passenger Vehicle plant), the production capacity of Dongfeng Peugeot Citroen Automobile increased to 450,000.

Mid-term Production Forecast by IHS Global Insight

China: Light vehicle production by Manufacturing group (IHS Global InsightForecast)

(Unit)

Group	Brand	2008	2009	2010	2011	2012	2013	2014	2015
ANHUI JIANGHUAI	ANHUI JIANGHUAI	175,550	283,122	364,262	395,715	410,595	433,475	465,211	496,804
BEIJING AUTOMOTIVE	BEIJING AUTOMOTIVE	45,291	51,013	57,437	73,327	96,109	102,426	104,683	111,923
BEIJING AUTOMOTIVE	FOTON	337,826	540,006	506,282	522,215	523,484	528,967	548,063	567,691
BMW	BMW	33,000	44,004	54,507	57,360	71,321	80,987	85,321	88,683
BYD AUTO	BYD AUTO	192,971	427,732	457,395	453,409	434,802	423,611	441,875	439,061
CHANGAN	CHANGAN	424,508	823,839	886,837	895,417	965,258	1,001,095	1,056,752	1,119,725
	CHANGAN BUS(BAODING)	1,718	1,736	2,394	2,462	2,411	2,329	2,328	2,352
	CHANGHE	49,952	71,922	77,647	76,692	79,889	81,764	85,585	89,443
	HARBIN HAFEI	189,969	249,796	253,496	249,869	240,964	250,639	264,161	276,999
	LANDWIND	10,685	8,465	9,989	22,998	24,158	26,717	30,325	33,339
CHENGDU WANGPAI	CHENGDU WANGPAI	2,403	4,051	3,982	5,901	6,264	6,390	6,697	6,991
CHENGDU XINDADI	CHENGDU XINDADI	3,471	2,629	2,806	3,368	3,441	3,536	3,689	3,869
CHERY	CHERY	350,006	508,567	598,460	702,404	752,561	840,440	940,060	1,051,697
CHINA BRILLIANCE	JINBEI	160,682	190,133	198,792	209,798	217,277	226,084	241,124	257,411
CHINA BRILLIANCE	ZHONGHUA	81,422	124,056	141,972	178,501	179,994	195,322	215,739	235,662
CHINA FIRST TRACTOR	CHINA FIRST TRACTOR	4,379	6,680	7,954	7,888	8,372	8,543	8,953	9,344
CHRYSLER LLC	BEIJING JEEP	0	0	0	0	0	0	0	0
	CHRYSLER	11,770	1,267	0	0	0	0	0	0
	DODGE	645	38	0	0	0	0	0	0
DAIMLER AG	MERCEDES- BENZ	15,390	14,634	36,585	54,576	59,406	61,731	64,447	67,957
DONGAN HEIBAO	DONGAN HEIBAO	36,785	63,630	55,638	56,538	59,593	61,017	64,074	66,977
DONGFENG	DONGFENG	327,000	479,573	529,418	544,316	571,369	591,691	627,403	661,399
FAW	FAW	199,016	308,067	281,766	300,914	329,119	346,897	381,652	411,955
	FAW SICHUAN	0	0	0	0	0	0	0	0
	FAW TIANJIN	172,369	214,517	245,773	235,052	207,014	210,842	154,313	169,101
	FAW TIANJIN MEIYA	604	4,434	4,730	4,694	4,970	5,158	5,500	5,786
	HAIMA	89,122	118,298	131,837	137,203	139,506	147,165	161,138	173,682
FEIDIE AUTO	FEIDIE AUTO	0	9,567	8,958	9,087	9,259	9,761	10,446	11,145
FIAT GROUP	FIAT	369	0	0	0	22,925	47,172	48,074	50,125
FIAT GROUP	IVECO	19,888	24,940	21,150	22,713	23,266	24,047	15,917	17,038
FORD	FORD	182,052	266,496	262,881	293,026	316,010	341,847	360,028	386,578
FORD	VOLVO	5,452	14,976	18,007	23,718	33,985	37,426	39,493	41,362
FUJI HEAVY	GUIZHOU	0	0	0	0	0	0	0	0
FUJIAN LONGMA	FUJIAN LONGMA	3,914	2,309	1,298	2,637	2,726	2,834	2,992	3,155
FUQI	FUQI	544	34	516	561	579	601	636	668
GEELY	GEELY	220,780	330,275	392,046	460,295	476,477	520,951	573,042	608,973
GM	BUICK	275,203	436,573	451,717	483,005	499,207	496,718	496,694	513,813
	CADILLAC	844	2,793	2,608	3,377	3,976	4,874	5,593	6,322
	CHEVROLET	205,319	333,135	375,946	398,686	418,789	429,321	454,363	462,509
GONOW	GONOW	24,487	51,008	63,448	67,917	67,796	70,396	74,718	78,640
GREAT WALL	GREAT WALL	134,339	226,560	279,636	296,399	328,135	379,326	416,857	455,516
GUANGZHOU AUTO	CHANGFENG	27,200	31,389	36,153	36,525	37,084	41,047	47,058	51,914
	GUANGZHOU AUTO	0	0	3,018	14,383	43,738	47,224	51,622	56,124
	GUANGZHOU AUTO BUS	0	858	1,087	1,113	928	955	998	1,042
GUANGZHOU YANGCHENG	GUANGZHOU YANGCHENG	534	0	0	0	0	0	0	0
GUILIN BUS	GUILIN BUS	0	1,080	948	971	964	785	821	857
GUIZHOU YUANTONG AERONAUTIC AUTO	GUIZHOU YUANTONG AERONAUTIC AUTO	0	500	506	540	561	592	622	652
HANYANG	HANYANG	0	0	0	0	0	0	0	0
HEBEI CHANGZHENG	HEBEI CHANGZHENG	0	1,934	2,784	3,043	3,143	3,250	3,432	3,604
HEBEI ZHONGXING	ZHONGXING	9,062	13,195	10,940	11,653	12,529	14,689	16,523	19,010
HINO	HINO	0	1,535	1,552	1,669	1,792	1,873	1,964	2,040
HONDA	HONDA	518,359	602,455	667,388	662,552	688,921	716,469	749,976	777,550
HUATAI	HUATAI	0	20,685	28,829	20,710	15,218	11,493	9,170	10,016
HUBEI SANHUAN	HUBEI SANHUAN	0	459	429	428	458	472	493	513
HUBEI SANHUAN	HUBEI SANJIANG	0	243	0	0	0	0	0	0
HUNAN ZOOMLION AXLE WORKS	HUNAN ZOOMLION AXLE WORKS	2,950	1,299	1,445	1,580	1,631	1,686	1,781	1,870
HYUNDAI	HYUNDAI	312,697	601,757	532,180	539,770	558,570	549,536	538,153	538,044
HYUNDAI	KIA	139,067	244,068	258,233	277,881	263,432	281,477	285,902	290,841
ISUZU	QINGLING	33,997	39,774	37,424	50,679	56,208	61,272	67,872	75,306
JIANGLING AUTO GROUP	JIANGLING	65,559	81,228	87,990	101,977	107,581	112,899	121,229	130,512
JIANGXI FIRE ENGINE	JIANGXI FIRE ENGINE	0	1,156	1,178	1,205	1,055	1,057	1,357	1,418
JINGGONG ZHENJIANG AUTO	JINGGONG ZHENJIANG AUTO	0	73	54	55	58	58	61	66
KING LONG	GOLDEN DRAGON	9,563	9,785	10,295	11,255	11,675	12,132	12,792	13,599
KING LONG	KING LONG	3,616	6,855	6,774	10,046	13,886	16,144	19,458	20,788
LIAONING HUANGHAI	HUANGHAI	10,730	12,895	12,157	13,615	14,532	15,335	16,524	17,836
LIAONING LINGYUAN AUTO	LIAONING LINGYUAN AUTO	0	1,910	1,929	2,059	2,141	2,259	2,373	2,489
LIFAN GROUP	LIFAN	113,344	91,227	71,855	78,490	83,730	90,438	99,210	108,123
MAZDA	MAZDA	105,932	173,889	178,106	208,643	208,036	218,634	226,119	232,349
MITSUBISHI	MITSUBISHI	19,395	22,205	44,299	51,541	53,528	57,741	59,266	61,681
MITSUBISHI	SOUTHEAST	17,611	66,079	73,373	74,759	72,227	77,567	84,465	91,915
NANJING AUTOMOTIVE	YUEJIN	44,844	61,543	65,656	71,755	74,152	76,725	81,009	85,184
NISSAN	NISSAN	365,269	535,657	591,486	635,160	635,293	645,605	673,031	699,632
PSA	CITROEN	91,575	159,233	181,748	178,642	179,346	194,000	202,404	208,481
PSA	PEUGEOT	81,145	103,656	101,899	145,251	162,024	158,049	164,017	170,108
SAIC	NANJING-MG	9,447	15,678	38,658	39,751	40,606	43,342	46,720	50,265
	ROEWE	28,830	87,785	183,888	254,174	309,391	345,281	387,171	431,406
	SHANGHAI HUIZHONG	2,580	2,654	3,687	6,222	6,414	6,523	6,861	7,298
	SHANGHAI YIZHENG	0	0	0	0	0	0	0	0
	SSANGYONG	0	0	0	0	0	0	0	0
	WULING	610,034	1,053,830	1,036,881	1,110,055	1,178,871	1,207,332	1,266,360	1,323,181
SHAANXI AIRCRAFT	SHAANXI AIRCRAFT	0	0	0	0	0	0	0	0
SHANDONG AUTO	SHANDONG AUTO	0	878	807	804	861	886	926	966
SHANDONG KAIMA	SHANDONG KAIMA	64,439	98,756	101,581	109,620	109,976	112,133	116,061	120,477
SHANDONG TANGJUN OULING AUTO	SHANDONG TANGJUN OULING AUTO	37,169	59,455	54,815	60,948	66,378	66,276	70,320	74,827
SHANGHAI WANFENG	WANFENG	0	0	0	0	0	0	0	0
SHANXI AUTO GROUP	SHANXI AUTO GROUP	0	8,921	7,943	7,918	8,474	8,716	9,110	9,516
SHENYANG FUSANG	SHENYANG FUSANG	0	0	0	0	0	0	0	0
SHUANGHUAN	SHUANGHUAN	3,735	2,206	1,802	1,924	2,195	2,714	3,156	3,685
SHUGUANG GROUP	HUANGHAI	4,455	8,425	4,914	4,936	5,386	6,217	7,342	8,211
SICHUAN AUTO GROUP	YEMA AUTO	0	1,408	1,190	1,199	1,215	1,241	1,280	1,311
SICHUAN NANJUN	SICHUAN NANJUN	35,953	45,912	49,595	50,150	53,242	54,333	56,935	59,422
SICHUAN YINHALE MACHINERY	SICHUAN YINHALE MACHINERY	1,980	1,891	2,070	0	0	0	0	0
SUZUKI	SUZUKI	186,496	243,079	273,640	248,307	240,239	258,346	274,286	286,712
TOYOTA	DAIHATSU	4,375	2,226	0	0	0	0	0	0
	LEXUS	0	0	0	0	38,597	49,653	54,828	56,220
	TOYOTA	566,187	610,384	706,190	790,806	827,701	870,312	892,656	917,306
VW GROUP	AUDI	103,379	142,244	177,955	183,724	184,854	194,447	198,531	203,842
	SKODA	55,760	131,633	154,346	156,687	162,156	162,654	170,179	179,899
	VW	815,861	1,113,450	1,192,358	1,210,056	1,185,000	1,250,282	1,301,604	1,356,864
YAXING	YAXING	419	299	369	379	603	606	631	664
YOUNGMAN	EUROPESTAR	0	22,193	13,985	13,606	12,589	12,727	13,285	13,613
YULON	LUXGEN	0	0	3,866	47,888	74,703	79,624	86,965	94,639
ZHENGZHOU YUTONG COACH	ZHENGZHOU YUTONG COACH	0	3,454	3,279	3,267	3,497	3,597	3,759	3,928
ZHONGSHUN	ZHONGSHUN	11,287	2,540	4,659	4,266	3,694	3,769	3,951	4,123
ZHONGXING	ZHONGXING	22,694	34,978	35,216	36,053	30,782	35,465	41,746	47,159
ZOTYE	JIANGNAN	15,261	2,584	2,293	0	0	0	0	0
ZOTYE	ZOTYE	23,404	59,404	38,164	40,949	42,523	47,111	55,316	60,543
N/K	N/K	15,750	0	0	0	0	0	0	0
Total		8,581,669	12,885,764	13,894,036	14,843,677	15,485,395	16,237,150	17,067,627	17,973,336

Source: Global LV Production Data (February 8, 2010)
(Note)
1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons. Trucks and buses in the segment of larger than medium-size vehicles are not included.
2. Figures for 2008 and 2009 indicate actual production results.
3. All rights reserved. Reproduction of any data will require permission of IHS Global Insight.

Production Forecast : China (IHS Global Insight Forecast)

- The Chinese government's plan to implement Euro-4 emission standards for light vehicles nationwide from 1 July 2010 is subject to delay, as China would not be able to supply fuel that met the Euro-4 standard for the whole nation by 2010. In fact, according to the China Association of Automobile Manufacturers (CAAM), the only fuel that China could produce and supply for the whole country at this stage would meet only the Euro-3 standard. CAAM has been calling for the government to delay the implementation of Euro-4 emission standards. As CAAM argues, premature implementation of Euro-4 would do more damage to the environment and incur higher costs for Chinese consumers.

- Chinese car exports experienced a sharp downfall of more than 60% in 2009, and so the Chinese government issued its Plan for Promoting Car Exports in October 2009. According to the plan, the Chinese government is aiming to expand exports of vehicles and vehicle parts by an average of 10% a year through 2011, and to triple exports to US$85 billion a year by 2015. China will encourage domestic automakers to set up production plants and outlets overseas and to support the export of energy-efficient auto products. China hopes automakers could shift their target export markets from the low end to the middle end and the high end.

- Apart from parallel production of old and new models, it has become common practice for foreign companies to launch "new" models based on "old" platforms in China. Successful examples include the VW Lavida (model y) and the New Bora (model x), which are based on the old Bora (PQ34 platform). Other examples include Hyundai/Kia's RBC and QBC (both of which are based on the current Accent platform), the EFC and NFC (based on the old Sonata EF and NF), SGM Wuling's GP50 (based on the current Excelle J200 platform), and PSA's TX3/BX3 (based on the PF2 platform). SGM is also planning a major changeover for its current J200 Excelle in 2012 (under model code SGM615).

- The Chinese passenger car market is showing strong signs of recovery, and so many major global OEMs are now planning to expand capacity.

- Dongfeng Nissan will spend 6.5 billion yuan (US$953 million) to build three plants in the next three years. A total of 5 billion yuan (US$735 million) will be used to develop new passenger car plant in Guangzhou. This will bring the total annual capacity of the Guangzhou plant to 600,000 units (it is currently 360,000 units). A total of 1.5 billion yuan (US$218 million) will be invested on Dongfeng commercial vehicle plants, including a new engine plant, with an annual capacity of 100,000 units, and the second plant for Zhengzhou Nissan, which will bring extra annual capacity of 100,000 units.

- BMW and Brilliance China will invest US$735 million to expand their annual capacity from 30,000 units to 75,000 units by the end of next year and to construct a second plant (scheduled to commence in 2010). Annual capacity of the second plant will reach 100,000 units.

- Changan Ford will invest 3.34 billion renminbi (US$490 million) to build a highly flexible passenger car plant in Chongqing. Upon the completion (in 2012) the new plant will be able to produce 150,000 units a year, thus boosting total annual production capacity at Changan Ford Mazda to 600,000 units.

- VW announced that it would spend a further 4 billion euro (US$5.8 billion) on its operations in China over the next few years. The investment plan was approved by its Supervisory Board on 11 September. The money, which will come from the cash flow of its Chinese joint ventures, will be invested between 2009 and 2011. The investment will be used to expand annual capacity at its facilities in Nanjing and Chengdu to 300,000 and 350,000 units respectively; this will include the construction of new body, paint, and assembly facilities. The expansion should be completed by 2012. The Nanjing plant will build three new models, while the site at Chengdu will manufacture two models.

- Honda, however, has decided against expanding its capacity in Guangzhou. Although its Chinese partner, Guangzhou Auto, indicated that it wants to expand the capacity of the two plants in Guangzhou.from the current 360,000 units to 480,000 units.Honda does not plan to do so this year or next year. Currently, Honda has two plants: one with annual capacity of 240,000 units (on two shifts) and one with a capacity of 120,000 units.

- Chinese OEMs are riding the waves of merger and acquisition both at home and abroad. In the latest development, Beijing Automotive is said to have acquired 40% of Fujian Daimler in July. It would manufacture Mercedes Viano, Vito and Sprinter in Fujian Province.

- The biggest deal of 2009 came in November, when Changan announced its merger with Changhe and Harbin Hafei. The new Changan Group is expected to produce around 1.2 million light vehicles in 2010, which makes it one of the largest automotive groups in China. Changan's deal also demonstrates that the Chinese government is speeding up the long overdue consolidation of Chinese auto industry, as laid out in its Auto Industry Stimulus Plan. We would expect the new Changan Group to integrate the passenger car and mini-vehicle platforms of Changan, Changhe, and Harbin Hafei in the coming years, as those platforms are used to produce competing models.

- On the international stage, Geely is reported to be at the final stage of negotiations with Ford about a takeover of Volvo. Geely expects to seal the deal by the end of 2009, assuming it can manage to solve the thorny intellectual property issues with Ford in the coming weeks. Geely's acquisition push is fully backed by Chinese state banks, which would provide a funding of US$1 billion.

- Beijing Automotive is reported to be teaming up with a U.S. merchant banker Merbanco to evaluate taking over the Swedish brand Saab from GM. This news comes after the Swedish "supercar"manufacturer Koenigsegg withdrew its offer to buy Saab in late November.

- SAIC confirmed it is in the process of acquiring U.K van-maker LDV. SAIC is reportedly interested in the powertrain technology, as well as in the production line for Maxus vans, and it intends to move LDV's production operations to China. In addition, SAIC is also talking to General Motors about buying one of its India plants to produce its Wuling vans in the country.

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SAIC Motor, FAW Group, and Dongfeng Motor Corp. will be capable of producing 7.8 million a year at the end of 2010 In their future plans, SAIC Motor and FAW Group will have a production capacity of 3.7 million while Dongfeng Motor Corp. will have 3.9 million