Changan Automobile Group targets sales of six million units by 2020
Global R&D network established; Changan brand name aggressively promoted
2012/11/09
- Summary
- Decline of sales volume continues in 2012
- To promote construction of new production facilities in and outside of China
- Own brand division to strengthen R&D and aggressively launch new models
- Joint venture with Ford to make additional investment for launching new models
- Joint venture with PSA begins import sales of DS Line
- Production and sales of joint ventures with Japanese OEMs (Suzuki and Mazda) affected by anti-Japanese protests
Summary
Since 2011, the sales volume of Changan Automobile Group has been on the decline. This trend has been caused by the termination of purchase promotional programs by the Chinese government as well as the stalled growth experienced throughout Chinese national brands (Chinese manufacturers' own brands) resulting in a y/y decrease of 15.6% to 2.01 million units for 2011, and sales volume for the January to September period of 2012 was down 8.5% y/y to 1.4 million units.
In spite of struggling group sales, Changan Automobile Group is proactively introducing new models under its own brand to expand its share in the market. In early 2011, the manufacturer established a worldwide R&D network at nine locations in five countries. To date, a number of models engineered through this system, such as the Eado and the Alsvin V3, have been introduced to the market. Changan Automobile Group has declared that it will grow the number of vehicles manufactured and sold to six million units by 2020, covering 60% of the volume with its own brand models.
In the realm of its joint venture with foreign OEMs, Ford is increasing its investment in the joint venture. The joint ventures owned by Changan Ford Mazda and Jiangling Motors are jointly constructing five plants. With the completion of these plants, Ford expects to achieve an annual vehicle production capability of 1.2 million units. With the acquisition of a heavy-duty truck OEM by Jiangling Motors, there's a rumor that Ford trucks may make an entry into the Chinese market.
The joint venture with PSA is organizing production sites and sales networks aiming to achieve production and sales volumes of one million units by 2020. As the first phase to accomplishing this goal, it began the import sales of the DS Line in June 2012.
On the other hand, September sales volume for the joint ventures with Japanese OEMs dropped altogether due to anti-Japanese protests. Mazda and Suzuki both launched improved and new models, respectively, but some of the Japanese automakers are still cutting its productions as the situation continues to be uncertain.
Related Reports: Beijing Motor Show 2012 - Changan Automobile (June, 2012)
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