FAW Group (Part 1): Forms ten-year plan for own brand business

Annual sales target of 2 million own brand vehicles by 2020

2014/08/26

Summary

Unit sales of Top 6 OEMs in China

Unit sales of FAW Group by brand in China
FAW Group ranks third in industry with slow growth in sales volume

  China FAW Group Co., Ltd. is a pioneer in the Chinese automobile industry and is the first Chinese automaker to produce cars in China. FAW Group had been the top automaker in vehicle sales volume for a long time in the country (factory-shipment basis), however, it dropped tothe third position in the industry after SAIC Motor Corporation, Ltd. overtook its top position in 2006 and later by Dongfeng Motor Corporation (DFM) in 2010.

  Particularly, in and after 2010, its sales volume has been stagnant as the growth rate has been lower than those of other automakers. The sales volume in 2013 was about 2.90 million units. The automaker aims to sell more than 3.4 million units in 2014.

▽FAW Group relies on VW and Toyota brands

  The Volkswagen (VW) models, including the Audi, are the top-selling brand among the FAW Group brands in China. About 1.51 million units of the VW models were sold in 2013. The VW models are a driving force for FAW Group to increase its sales. The Toyota models are in second place with a sales volume of about 540,000 units. In contrast to the slump in sales of the Mazda models, the Toyota brand is on a road to recovery from the sluggish sales that had resulted from the worsening political relations between Japan and China. The sales volume of FAW Group's own brand comprising many models totaled to approximately 720,000 units.

▽Sales of group's own-brand cars show signs of recovery, especially in commercial vehicles

  The sales volume of FAW Group's own-brand cars (passenger cars and commercial vehicles) reached a record high of 1.04 million in 2010. After that, it dropped to 712,000 units in 2012. Since then, the sales volume has been gradually recovering. It slightly increased to 718,000 units in 2013 due to buoyant sales of the commercial vehicles. Although the sales volume of FAW Group's own-brand passenger cars is declining, sales of FAW Car Co., Ltd.'s own models increased by 65% in 2013.

▽FAW Group announces ten-year plan for its own-brand business and new energy vehicle strategy

  In May 2014, FAW Group announced its ten-year plan (up to 2025). In the plan, the automaker sets  an annual sales target of over 2 million units of its own-brand cars (factory-shipment basis, including exports) by 2020. The automaker also aims to hold more than 15% market share of  new energy vehicle market, including electric vehicles (EV) and plug-in hybrid vehicles (PHV) in China.

Related Reports:

* SAIC Motor's brand strategies and operations (Apr. 2014)
* China: Vehicle sales forecast to grow over 12% in 2014 (Feb. 2014)

Hongqi L5 Hongqi L5
FAW Car's high-end sedan "Hongqi L5" and its interior (at the 2014 Beijing Motor Show)
The standard selling price starts from CNY 5 million (JPY 83 million). It is an all-time high price for a Chinese own-brand passenger car. It is available in limited numbers from April 2014.

Organization chart for China FAW Group

Organization chart for China FAW Group

Principal data on China FAW Group (as of end of 2013)

Company name: China FAW Group Co., Ltd. (commonly referred to as FAW Group)
  Chinese government-owned automotive corporation, which is headquartered in China's northeastern city of Changchun, Jilin Province
  Ranking in the Fortune Global Top 500 corporation rankings in 2013: 141th

Number of employees of entire group: Over 120,000

Automobile sales (fully covers passenger car and commercial vehicle segments): Approximately 2.9 million units in 2013; over 24 million units on a cumulative basis

Financial data:
  Sales: CNY 460.5 billion (Jan.- Dec.)
  Total assets: CNY 303.3 billion (of which CNY 164 billion in current assets)

Provided with a supply chain that has a relatively strong competitiveness

60% of the subsidiaries and 70% of the total assets are jointly owned by FAW Group and outside companies, including foreign automakers (joint ventures, etc.).

Source: China FAW Group's 2013 annual report and media reports

China FAW Group's sales volume

(units)
2009 2010 2011 2012 2013 Jan.-Jun.
2013
Jan.-Jun.
2014
▽Grand total (FAW Group) 1,944,576 2,558,166 2,601,451 2,672,627 2,894,782 1,393,313 1,529,452
Owned brand vehicle 753,829 1,037,983 900,654 711,638 718,251 358,049 319,437
Passenger car 449,626 643,661 621,388 483,925 448,780 224,746 184,039
Commercial vehicle 304,203 394,322 279,266 227,713 269,471 133,303 135,398
JV brand vehicle 1,190,747 1,520,183 1,700,797 1,960,989 2,176,531 1,035,264 1,210,015
Passenger car 1,185,484 1,514,449 1,692,578 1,956,156 2,170,990 1,032,664 1,208,423
Commercial vehicle (Coaster) 5,263 5,734 8,219 4,833 5,541 2,600 1,592
▽(Of which) Passenger vehicle: sales volume by OEM (factory shipment basis)
OEM 2009 2010 2011 2012 2013 Jan.-Jun.
2013
Jan.-Jun.
2014
Passenger
car
Toyota JV
(Tianjin FAW Toyota, Sichuan FAW Toyota)
417,299 505,931 529,146 522,180 541,044 244,556 251,296
(Reference)* Coaster by Toyota JV 5,263 5,734 8,219 4,833 5,541 2,600 1,592
(Reference) *  Total on Toyota brand with FAW 422,562 511,665 537,365 527,013 546,585 247,156 252,888
VW Group JV (FAW-VW) 669,180 869,979 1,034,888 1,328,888 1,512,887 732,984 906,208
GM JV (FAW-GM) 1,157 1,270 174 94 8 8 7
(Reference)*   Light truck/Pickup and the other light vehicle of FAW-GM 33,353 86,954 55,958 55,515 59,084 29,721 28,079
(Reference) *  Total on FAW-GM 34,510 88,224 56,132 55,609 59,092 29,729 28,086
Mazda contract manufacturing (FAW Car plant) 99,005 138,539 128,544 105,088 117,059 55,124 50,919
FAW Car (Hongqi, Besturn and Oley series) 89,136 132,405 112,818 79,124 130,535 50,929 84,817
Tianjin FAW Xiali 212,222 250,360 253,035 185,018 130,511 71,526 37,301
FAW Jilin Automobile 56,048 119,294 103,645 90,942 79,968 40,821 21,898
FAW Haima Motor 91,063 140,332 151,716 128,747 107,758 61,462 40,016
△Passenger car Total 1,635,110 2,158,110 2,313,966 2,440,081 2,619,770 1,257,410 1,392,462
Note: The figures of the (Reference)* are not counted in the Passenger car Total.

▽Commercial included:sales volume by type (factory shipment basis)
Type of commercial vehicle 2009 2010 2011 2012 2013 Jan.-Jun.
2013
Jan.-Jun.
2014
By

type
Bus 6,474 7,250 9,499 5,910 7,052 3,173 1,962
(Of which) Toyota Coaster 5,263 5,734 8,219 4,833 5,541 2,600 1,592
Truck 107,782 114,679 73,516 63,778 74,119 38,832 29,274
Semi trailer tractor 74,685 143,887 97,883 63,558 80,807 37,241 41,805
Bus Chassis 4,204 3,623 3,158 3,411 2,695 1,418 920
Truck Chassis 116,321 130,617 103,429 95,889 110,339 55,239 63,029
△Commercial vehicle Total 309,466 400,056 287,485 232,546 275,012 135,903 136,990