Fiat/Chrysler in China (2): raising production capacity of vehicles/engines
Plans 600K-unit scale production of finished vehicles in 2014
Fiat has not had passenger car production in China since the dissolution of the partnership with Nanjing Automobile Group in February 2008. Fiat has merely a low sales volume of imports as of January 2012. Chrysler has had a negligible volume of commissioned production at Southeast (Fujian) Motor since Fiat-owned Chrysler withdrew the joint production with BAIC Group in January 2009.
Aiming for a 2% share in the Chinese passenger car market in 2014, Fiat-Chrysler Group will start production at the Changsha plant of GAC Fiat Motor in Hunan Province in July 2012 to establish an annual production capability of 300K to 330K units by 2014.
As for commercial vehicles, Fiat-Chrysler Group set up a goal that it will increase production in China from total 146K of chassis and joint ventures' Chinese brand vehicles of Yuejin and Hongyan in 2010 to 235K or greater in 2014.
According to the above production plans, Fiat-Chrysler Group will increase production volumes of passenger car engines to 300K units at the Changsha engine plant in Hunan Province, transmissions to 200K at the Changsha transmission plant of GAC Fiat Motor and 520K at the HAVECO's transmission plant.
This Report summarizes the recent trends of Fiat-Chrysler Group regarding plans to increase production capacities of finished vehicles and engines in China.
For the recent mid-term business plan, model plan and sales structure of Fiat-Chrysler Group in China, see Fiat-Chrysler Group in China (1): mid-term business/model plan and sales structure issued in January 2012.
Fiat-Chrysler Group's Business plan in China
|* Fiat-Chrysler Group will position the Chinese market as the most important strategic market. |
Centering around the Fiat brand, the group will deploy Chrysler (including Jeep), Alfa Romeo, and Lancia brands in the market.
* The group will promote a group-wide joint procurement in China to reduce its current average procurement cost by 30 to 40%.
|* GAC Fiat Motor: |
Implement the multiple brand model strategy, including Fiat and Alfa Romeo.
Considering production of the Jeep products for Chrysler.
Mount Fiat's cutting-edge engines and transmissions on all models to be produced.
|* NAVECO (Nanjing Iveco Automobile): |
Aim to be ranked in the top five among Chinese light truck manufacturers in 2015.
Enter into every segment of commercial vehicles, except heavy-duty trucks and pickups, by 2020.
|* SIH (SAIC-Iveco Hongyan Commercial Vehicle): |
Gain competitive superiority in the heavy commercial vehicle sector by 2015.
|* Fiat-Chrysler Group will aim to produce or to sell over 300K passenger cars and to achieve a 2% share in the Chinese market by 2014.|
|* GAC Fiat Motor will increase production or sales from about 300K units in 2014 to 500K units in 2015.|
|* Fiat-Chrysler Group will aim to increase production or sales of commercial vehicles (including affiliate brands) from 235K units in 2014 to 450K-550K units in 2015.|
|* NAVECO: |
Have production or sales volume of 150K units in 2011 (breakdown is 115K Yuejin brand vehicles and 35K Iveco vehicles) and sales of ten billion RMB.
Have production or sales volume of 300K-400K units in 2015 (breakdown is at a minimum 250K Yuejin vehicles and 50K Iveco vehicles) and sales of 22 billion RMB.
Have an 11% share of the Chinese light truck market.
Establish capabilities to produce 30K green vehicles, such as EVs and HVs, per year in 2015.
|* SIH: |
Have production or sales volume of 43K-45K units and sales of ten billion RMB in 2011.
Have sales volume of 150K units (of which more than 10K will be exported) and sales of 25 billion RMB.
|* HAVECO (Hangzhou Iveco Transmission):(NOTE) |
Aim to sell a total of 235K and 368K of MTs and DDCTs (Dry Dual Clutch Transmission) respectively in 2012 and 2013.
|Model plan||* Fiat-Chrysler Group will launch new models, including the new Fiat C-Medium, in 2012. Most of these new models will be built on the Fiat Compact platform.|
|* GAC Fiat Motor: |
Establish a model lineup covering mini cars, medium/high end vehicles, and SUVs.
Launch at least one new model per year from 2012 to 2015.
|* NAVECO: |
Expand its business centering around light commercial vehicles.
Develop novel chassis for own brand "Yuejin" vehicles in 2011.
Fully remodel all the existing models by 2020.
Proactively employ Iveco's technologies, such as the Iveco Sofim diesel engine, for own brand "Yuejin" commercial vehicles as a powertrain strategy.
In addition, likely to establish a product lineup covering medium-duty trucks, medium/high end light trucks, and low end light and mini trucks on a long-term basis.
|* SIH: Add slightly narrower heavy-duty trucks and vehicles with special body by 2015.|
Source: Interview by MarkLines, Press release of Fiat or Iveco (April 21, 2010), "GAC Fiat Motor's development strategy plan (release on September 19, 2010), National Business Daily (January 19, 2011), other various media reports
NOTE: HAVECO is an onboard transmission supplier. It is equally owned by Fiat, Guangzhou Automobile Group Components (a parts supplier owned by Guangzhou Automobile Group [GAC]), and Hangzhou Qianjin Gear (a local parts supplier in Hangzhou).
Production capabilities to total 670K or more of passenger cars and commercial vehicles in 2014
Table 1: Fiat-Chrysler Group's production volume and production capacity of joint venture plants in China
|Joint venture company||Plant or production line of related finished vehicles||Production volume (unit)||Annual production capacity (unit)|
|2010||January- October 2010||January- October 2011||As of November 2011||After expansion (planned year)|
|Passenger vehicle||GAC Fiat Motor||Changsha plant (passenger vehicle)||(The plant is under construction. It will start operation and production in July 2012.)||-||140K (2012)→ 300K-330K (2014)→ 500K (2015)|
|Jeep's joint venture company in China||n.a. (Location and products are not yet decided)||(Under negotiation with GAC Group (Guangzhou Automobile Group) for joint venture)||-||n.a. (2013 or later)|
|Total||1,131 (NOTE)||1,096 (NOTE)||59 (NOTE)||n.a.||140K (2012)→ 300K-330K or more (2014)→ 500K or more (2015)|
|Commercial vehicle||NAVECO (Nanjing Iveco)||Nanjing Jiangning plant (light and heavy-duty truck)||71,472||60,826||59,825||n.a.||n.a.|
|Nanjing Heimoying plant (light van and off-road vehicle)||39,908||32,583||37,420||n.a.||n.a.|
|Total||111,380||93,409||97,245||200K||300K (2014)→ 400K (2015)→ 500K (2020)|
|SAIC-Iveco Hongyan Commercial Vehicle (SIH)||Chongqing Jiangbei plant (heavy- and medium-duty commercial vehicle)||34,494||26,343||22,412||40K or more||80K|
|Chongqing Jiangbei new plant (medium- and heavy-duty commercial vehicle)||(Under construction as of the end of 2011)||-||70K or more (by 2015)|
|Total||34,494||26,343||22,412||40K or more||150K or more (by 2015)|
|Total||145,874||119,752||119,657||240K or more||340K or more (2014)→ 550K or more (2015)→ 650K or more (2020)|
|Grand total (Plants/lines for Fiat-Chrysler Group brand vehicles)||147,005||120,848||119,716||Over 240K||380K or more (2012)→ 640K-670K or more(2014)→ over 1,050K (2015)|
Source: Interview by MarkLines, Fiat's medium term business plan "FIASA 2010-2014 Plan" (April 21, 2010), Fiat's and Iveco's press release, China Times (June 4, 2011), and other media reports NOTE: The data above are the commissioned production volume of the Chrysler Grand Voyager and the Dodge Caravan by Southeast (Fujian) Motor.
Fiat: GAC Fiat of joint venture to run Changsha plant in 2012, aiming to produce 300K units in 2014
|GAC Fiat will start running a passenger car joint plant in July 2012. The plant will embrace engine production facilities and an R&D center in Changsha Economic & Technological Development Zone, Hunan province. It plans to produce the first production model, the medium size passenger car New Fiat C-medium (temporary name). The new plant building in a site area of 700K square meters will hold pressing, welding, painting and assembling lines. Its annual production capacity will start with 140K passenger cars. The plant will build Fiat and Jeep brand cars. GAC Fiat will expand production from 300K or 330K units in 2014 to 500K units by 2015 in sequence according to news reports.|
Source: China Times (June 4, 2011), and other media reports
Jeep Division: Joint production with GAC Group is on the table
|Joint production has been discussed between Jeep Division and GAC Group (Guangzhou Automobile Group). At the Frankfurt Motor Show in Germany in September 2011, Mike Manley, CEO of Jeep Division, admitted that Jeep and GAC Group were negotiating joint production. He presented a view that the joint venture will be established within18 to 24 months (April 2013, at an earliest) without any hitch in approval process by the Chinese Government. The CEO paid a visit to GAC Group in the same month for the negotiation of the alliance.|
|Details of the new joint venture are unknown, including location and production scale. Yet, there is a plan to utilize the Changsha plant of GAC Fiat prior to running the new joint venture plant.|
Source: Automotive News China (September 20, 2011), other media reports
Nanjing Iveco to establish 400K-unit level annual production capabilities in 2015
|Nanjing Iveco (NAVECO) with an annual production capacity of 200K units as of November 2011 is reinforcing the production capabilities to achieve the mid- to long-term sales target of 300K to 400K units in 2015. It plans to increase the capabilities from 300K in 2014 to the 400K unit-level in 2015, and to the 500K unit-level or greater in 2020.|
Source: China Commercial Vehicle News (January 5, 2011), Auto Observation (November 15, 2011), other media reports NOTE: The NAVECO's parent company Nanjing Automobile Group was wholly owned by SAIC Motor Group in January 2008. NAVECO, therefore, has become a light commercial vehicle division of the SAIC Motor Group.
SIH to have at least total 150K-unit level annual production capabilities in 2015 upon the second Plant built
|SIH (SAIC-Iveco Hongyan Commercial Vehicle) in January 2011 announced the plan to build a second plant in Chongqing. The progress is unknown, but it was reported that SIH started preparation for building the plant in January 2011. According to the report, the new plant will have an annual production of 70K units or greater by 2015, and as a result, the production capacity will aggregate to at least 150K units with that of the existing plant.|
|The first plant with a site area of 460K-square meters is capable of producing 40K units as of December 2011. With three shifts and overtime work, it is possible to increase the production to 80K units at maximum.|
Source: Chongqing Economic Times (January 4, 2011), other media reports
Powertrain production capabilities for both engines and transmissions to be strengthened
Table 2: Fiat-Chrysler Group's production capacity of joint venture engine and transmission plant in China
|Joint venture company||Plant||Production model (plan)||Annual production capacity (unit)|
|As of November 2011||After expansion (planned year)|
|GAC Fiat||Changsha engine plant||Fire T-Jet 1.4-liter small turbo engine for passenger cars with a maximum output of 88 kW or 110 kW||(under construction)||220K (2012)→ 300K (2014-2015)|
|Changsha transmission plant||Transmissions for passenger cars, including six-speed AMT||200K (2014-2015)|
|SAIC-Fiat Hongyan Powertrain (SFH)||Chongqing Beibuxinqu plant||Iveco Cursor 9/NEF/F1C series diesel engines for heavy-, medium- and light-duty commercial vehicles and industrial equipment, with a maximum output of 65 to 294 kW and a maximum torque of 300 to 1600 Nm||Approximately 100K||200K (medium plan) (NOTE 1)|
|Nanjing Iveco (NAVECO) (NOTE 2)||Nanjing engine branch (Yuhuataiqu engine plant)||Diesel engines for light commercial vehicles and off-road vehicles: Iveco Sofim 8140 or 8142 (2.5 liter or 2.8 liter), which are also exported to the European market including Italy.||75K or more||n.a.|
|Transmission branch (Nanjing Heimoying transmission plant)||Transmissions for midsize and light vehicles, and SUVs and MPVs: Iveco 2830.5, 2826.5 or 2826 series and AMTs, which are also exported to the US market||60K or more||n.a.|
|Hangzhou Iveco (HAVECO)||Hangzhou transmission plant||MTs and ATs for light commercial vehicles and passenger cars||400K (NOTE 3)||520K (2014) (NOTE 4)|
Source: Interview by MarkLines, China Commercial Vehicle News (January 1, 2011), other media reports NOTE 1: A half of SFH's medium-term target for an annual production capacity of 200K units will be exported to the US market and others. NOTE 2: NAVECO recorded a production volume of 30,205 diesel engines during the January - October period of 2011. In addition, it produced 4,806 units of other engines. NOTE 3: HAVECO's annual production capacity of 400K transmissions (as of November 2011) includes approximately 100K units of the C510 series, 120K units of the H Series and 100K units of the C514 Series. NOTE 4: HAVECO's 2014 annual production plan for 520K transmissions consists of approximately 100K units of the C510 Series, 120K units of the H Series, 100K units of the C514 Series and 200K units of the DDCT Series.
GAC Fiat to establish annual production capacities of 300K engines and 200K transmissions by 2015
|GAC Fiat will start operation and production at the engine factory in the Changsha Assembly Plant by July 2012. The plant will mainly build the Fire T-Jet 1.4-liter turbo engine for the global strategy with a maximum output of 88 kW or 110 kW for FPT (Fiat Powertrain). According to the annual production capacity plan, the engine plant will start with 220K units, and will expand to 300K units in 2014 to 2015 after the second phase construction, and to 500K-unit scale eventually.|
|As for transmissions, GAC Fiat plans to establish production capabilities for 200K units in 2014 to 2015. It will produce six-speed AMTs.|
Source: Fiat's press release (July 6, and November 26, 2009), other media reports
SFH to establish 200K-unit level annual production capabilities in the medium run
|SFH which is in Chongqing Beibuxinqu Automotive Industrial Park will expand the annual production capabilities for medium and large diesel engines from about 100K units as of December 2011 to 200K units in the medium run. This plant builds Iveco CURSOR 9/NEF/F1C Series diesel engines for heavy- medium- and light-duty commercial vehicles and equipment. The engine produces a maximum output of 65 to 294 kW and a maximum torque of 300 to 1600 Nm. Some of the products are exported to the US and other countries.|
Joint venture transmission plant in Hangzhou to start production of DDCT in 2013
|Fiat will grant HAVECO a license to produce DDCTs (Dual Dry Clutch Transmissions). Three of the shareholders (Fiat, GAC Component Co., Ltd. and Hangzhou Advance Gearbox) signed a letter of intent regarding the licensing in June 2011.|
|The three shareholders will additionally invest total 2.269 billion RMB to start production of DDCT in 2013. The annual production capabilities for the DDCT and other transmissions will be expanded to 520K units eventually.|
Source: Nanfang Daily (June 10, 2011), Hangzhou Advance Gearbox's press release (June 7, 2011), other media reports
Others: SIH to establish a steering system joint venture
SIH and Jingzhou Henglong Automotive System signed the memorandum with respect to establishing a steering system joint venture company on December 1, 2011.
Both companies jointly established Chongqing Henglong Hongyan Automotive Steering System Co., Ltd. in the Shuangqiao Economic & Technological Development Zone of Chongqing City. The total investment amounted to 120 million RMB, and the capital was 60 million RMB. It has an annual production capacity of 200K sets of steering systems. The venture company supplies the product to SIH, planning to expand the business to other Chinese OEMs as well.
Jingzhou Henglong Automotive System headquartered in Jingzhou, Hubei Province is a steering system supplier owned by Hubei Henglong Group. It produces about 130K sets of steering systems at an annual production capacity of about 300K sets as of 2011, and exports them mainly to the Chrysler's US plants.
Table 3: Fiat-Chrysler Group's production volume in China by model
|OEM||Model||2007||2008||2009||2010||January- October, 2010||January- October, 2011||Remark|
|Passenger vehicle||Nanjing Fiat Automobile (current Shanghai VW Nanjing plant)||Palio 1.3L||121||1||-||-||-||-||(Liquidated in December 2007)|
|Palio Weekend 1.3L||0||1||-||-||-||-|
|Palio Weekend 1.5L||2,105||19||-||-||-||-|
|Perla 3box 1.7L||3,061||202||-||-||-||-|
|Former Beijing DCX (current Beijing Benz) (NOTE)||Chrysler 300||9,004||822||-||-||-||-||(Sales discontinued since 2009)|
|Soueast (Fujian) Motor (NOTE)||Chrysler Grand Voyager||1,588||2,169||277||126||94||45||(Manufacturing low-volume)|
|Dodge Caravan||0||645||38||1,005||1,002||14||(Production discontinued)|
|Total (Fiat-Chrysler Group)||26,415||12,599||315||1,131||1,096||59||-|
|* Total (Fiat brand)||15,756||369||-||-||-||-||-|
|* Total Chrysler and Dodge brand)||10,659||12,230||315||1,131||1,096||59||-|
|Commercial vehicle||SIH||Heavy-duty truck||21,392||19,677||20,265||32,757||25,085||21,105||-|
|Semi-trailer (the fifth wheel coupling bears a load of 25-40 tons)||1,701||1,624||1,177||724||585||117|
|Semi-trailer (the fifth wheel coupling bears a load of 40 tons and more)||325||230||817||1,013||673||1,190|
|Total (including Chassis)||23,418||21,531||22,259||34,494||26,343||22,412||-|
|NAVECO (Nanjing Iveco)||Heavy-duty truck||490||972||52||-15||-15||0||-|
|Total (including Chassis)||73,699||69,303||89,155||111,380||93,409||97,245||-|
|Total (Iveco/Yuejin brand)||97,117||90,834||111,414||145,874||119,752||119,657||-|
(Reference) Production volume of Chinese OEMs' own brand vehicles based on Fiat models
|OEM||Model||2007||2008||2009||2010||January- October 2010||January- October 2011||Remark|
|Passenger car||Zotye Holding Group (Hunan Jiangnan Automobile) (NOTE)||Meng Di Bo Lang (based on the second generation Multipla)||-||-||-||2,378||2,378||0||-|
|Langyue (based on the second generation Multipla)||-||-||-||5,981||956||10,764|
|Langlang (based on the Palio)||-||-||-||-||-||5,686|
|Langjun (based on the Siena)||-||-||-||-||-||2,185|
|GAC Motor||Chumpchi (based on the Alfa Romeo166)||-||-||-||-||-||12,401||-|
|Total (vehicles based on Fiat Group models)||-||-||-||8,359||3,334||31,036||-|
NOTE: The above table includes only Fiat-Chrysler Group related model types.
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