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

Transition of Sales Volume 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)



Decline of sales volume continues in 2012

 The group sales volume for 2011 dropped 15.6% y/y to 2.01 million units, failing to achieve its original goal of 2.4 million units. It is assumed that the termination of government led purchase promotional campaigns such as "exchanging old for new" and "automobile industry promotion program in farming areas" at the end of 2010 are the cause of this downfall. Minivans and light-duty trucks were the targets for receiving subsidies for the "automobile industry promotion program in farming areas," and the Changan Automobile Group provided a variety of major minivans throughout the group, making a large contribution to the group sales between 2009 and 2010.

 The decline continued in 2012 with total sales down 8.5% y/y to 1.4 million units in the period from January to September. In addition to the overall sales decline in Chinese brand vehicles and CVs, the trend was also influenced by the September anti-Japanese protests resulting in the sales of Japanese OEMs to drop.

Changan Automobile Group's sales volume by model (Factory shipment)

(units)
Manufacturers Segment Models 2008 2009 2010 2011 Jan.-Sep.
2011
Jan.-Sep.
2012
Total of Passenger Vehicles 651,698 1,458,787 1,843,991 1,576,033 1,184,980 1,134,601
Changan
Automobile
Sedan,
Hatchback
Benni series 39,036 42,385 78,955 90,056 70,781 53,197
Zhixiang 1,153 3,961 4,069 0 0 0
Alsvin series 28 60,424 103,980 56,672 45,433 36,304
CX30 - - 3,145 15,525 9,724 7,493
CX20 - - 4,449 42,091 29,877 34,268
Eado - - - - - 22,031
Raeton - - - - - 63
MPV CM8 2,589 2,124 0 0 0 0
Joice 509 644 15 0 0 0
SUV CS35 - - - - - 365
Mini van 268,720 545,158 722,859 509,895 389,320 372,001
Subtotal 312,035 654,696 917,472 714,239 545,135 525,722
Changan
Ford Mazda
Sedan,
Hatchback
Mondeo 39,621 44,402 51,586 64,511 42,323 47,364
Focus 112,552 134,360 172,270 188,961 141,578 105,892
New Focus - - - - - 81,624
Fiesta - 47,379 75,199 63,990 47,301 38,139
Mazda2 13,692 22,674 21,681 9,037 7,667 2,546
Mazda3 29,225 48,228 68,617 74,022 49,434 55,922
Volvo S40 5,666 6,143 5,537 5,104 3,824 1,804
Volvo S80L - 8,353 11,554 9,780 7,113 3,912
MPV S-MAX 3,918 4,600 5,049 3,195 2,775 1,408
Subtotal 204,674 316,139 411,493 418,600 302,015 338,611
Changan
Suzuki
Sedan,
Hatchback
Cultus 47,291 59,677 41,644 52,243 39,494 27,914
Swift 16,328 31,994 50,989 42,469 30,808 28,883
SX4 38,886 50,409 65,651 67,424 53,105 35,138
Alto 21,618 0 0 0 0 0
New Alto - 7,989 41,729 57,872 46,500 41,258
Subtotal 124,123 150,069 200,013 220,008 169,907 133,193
Jiangling Motor
Holding
Sedan,
Hatchback
Landwind S-Drive 3,265 801 -4 1 1 0
MPV Landwind Fashion 741 914 472 996 745 265
SUV Landwind Brand's SUV 4,095 3,833 12,540 13,021 9,672 8,570
Baowei 2,765 3,451 4,311 10,792 8,273 8,818
Subtotal 10,866 8,999 17,319 24,810 18,691 17,653
Changhe
Automobile
Sedan,
Hatchback
Wagon R - 76,138 71,339 58,158 39,722 48,925
Liana - 3,848 3,984 18,510 15,527 5,462
Splash - - - 459 1 1,948
Ideal - 3,137 1,334 3,809 2,316 2,770
Mini van - 52,662 62,349 39,022 29,480 22,604
Subtotal - 135,785 139,006 119,958 87,046 81,709
Hafei
Automobile
Sedan,
Hatchback
Saima - 5,809 3,191 2,636 2,264 1,650
Lobo - 24,940 17,204 3,564 2,523 4,486
Saibao - 3,907 1,184 327 327 281
Mini van - 158,443 137,109 71,891 57,072 31,296
Subtotal - 193,099 158,688 78,418 62,186 37,713
Total of Commercial Vehicles 209,679 411,015 534,807 432,507 348,376 268,897
Trucks (including chassis) 179,683 374,807 480,147 371,990 302,828 226,764
Semi-trailers 0 0 46 77 58 93
Buses 29,996 36,208 54,614 60,440 45,490 42,040
Total of Changan Automobile Group 861,377 1,869,802 2,378,798 2,008,540 1,533,356 1,403,498
Note 1. The companies will be referred to in short names for convenience. Their full names are as follows:
Changan Automobile (Chongqing Changan Automobile Co., Ltd.), Nanjing Changan Automobile (Nanjing Changan Automobile Co., Ltd.), Hebei Changan Automobile (Hebei Changan Automobile Co., Ltd.), Beijing Changan Automobile (Beijing Changan Automobile Co., Ltd.), Jiangling Motor Holding (Jiangling Motor Holding Co., Ltd.), Jiangling Motors (Jiangling Motors Corporation, Ltd.), Changan Suzuki (Chongqing Changan Suzuki Automobile Co., Ltd.), Changan Ford Mazda (Changan Ford Mazda Automobile Co., Ltd.), Changan Kuayue Automobile (Chongqing Changan Kuayue Automobile Co., Ltd.), Changan Bus (Baoding Changan Bus Manufacturing Co., Ltd.), Changhe Automobile (Jiangxi Changhe Automobile Co., Ltd.), Changhe Suzuki (Jiangxi Changhe Suzuki Automobile Co., Ltd.), Hefei Changhe Automobile (Hefei Changhe Automobile Co., Ltd.), Hafei Automobile (Harbin Hafei Automobile Industry Group Co., Ltd.), Hafei Motor (Hafei Motor Co., Ltd.), Changan PSA (Changan PSA Automobiles Co., Ltd.), Chang'an Heavy Vehicle (Taiyuan Chang'an Heavy Vehicle Co., Ltd.).
2. The sales volume for Jiangling Motors is included in Jiangling Motor Holding, and Changhe Suzuki in Changhe Automobile.
3. The "CV total" is a total sales volume of Changan Automobile, Jiangling Motor Holding, Changhe Automobile, Hafei Automobile, Changan Bus, Chang'an Heavy Vehicle, and Changan Kuayue Automobile.
4. Changhe Automobile, Changhe Suzuki, and Hafei Automobile were originally subordinate OEM companies of Aviation Industry Corporation of China. The three companies were merged into the Changan Automobile Group when Aviation Industry Corporation of China and China South Industries Group Corporation reorganized their automobile department and created the group in November 2009.
5. Changan Ford Mazda launched the third generation of the Ford Focus in early 2012. The new model went into market under the name New Focus to be sold along with its second generation model.
6. The data for 2011 and the January to September period of 2012 for Mazda3 includes sales volumes for the Chinese model of the second generation Axela, the Mazuda3 Xingcheng. It is now sold along with its first generation.
7. Changan Ford Mazda started manufacturing of the Volvo models at its Chongqing First Plant from 2006. The contracts for the S40 and the S80L will expire in 2015 and 2018, respectively.
8. Changan Suzuki has separate model names for the SX4 versions: the Tianyu SX4 for the hatchback and the Tianyu Shangyue for the sedan version.

 

 



To promote construction of new production facilities in and outside of China

In-country productions

Changan Automobile Group's Production Capacity

(units)
Manufacturers Plants As of Oct. 2012 Planned Models
Changan Automobile Changan Automobile Chongqing Jiangbei Plant *300,000 *300,000 Chana Star S460, Chana Star 2, Chana Jinniuxing , etc.
Chongqing Yubei Plant 400,000 400,000 Eado, Benni Mini, Benni Love, Alsvin, Alsvin V5, CX30, CX20, Raeton, CS35 , etc.
Changan Automobile
Yuzui Qianyi Auto City
(Jiangbei District, Chongqing)
300,000
(Started operations in Mar. 2011)
800,000
(2015)
Small-displacement cars, New energy vehicles
Nanjing Changan Automobile Nanjing Plant, Jiangsu Province *300,000 *300,000 Chana Star series
Hebei Changan Automobile Dingzhou Existing Plant, Hebei Province *210,000 *500,000
(2015)
Chana Star Light 4500, Chana Star Truck, New Chana Star, etc.
Dingzhou New Plant, Hebei Province *210,000
Beijing Changan Automobile Beijing Plant Construction started in Sep. 2010 200,000(1st phase to be completed in 2012)
→500,000
(2nd phase to be completed in 2015)
Planned: Alsvin V5, Raeton
Jiangling Motor Holding Changbei Plant, Jiangxi Province 50,000 50,000 Landwind X8, Landwind X9, Landwind X6, Landwind Fashion; Planned: Landwind X5
Jiangling Motors Jiangxi Existing Plant *200,000 *200,000 Yusheng, Baowei, Baodian, Kairui, New Generation Transit, Classic Transit, etc.
Xiaolan Plant, Jiangxi Province Construction started in Nov. 2007 *200,000
(max. 300,000, Operational in the1st half of 2013)
Planned: all-new Ford Transit, U375
Chang'an Heavy Vehicle
(Taiyuan Plant, Shanxi Province)
*15,000 *50,000 Trucks, Tractors, Special vehicles
Changan Suzuki Chongqing First Plant 250,000 250,000 Tianyu SX4, Tianyu Shangyue, Swift, New Alto, Cultus
Chongqing Second Plant Construction started in Apr. 2012 100,000
(1st phase to be completed at the end of 2013)
Suzuki's two new models
Changan Ford Mazda Chongqing First Plant 250,000 250,000 Mondeo-Zhisheng, Jingdian Focus, S-MAX, Volvo S40, Volvo S80L
Chongqing Second Plant 150,000
(Operations started in Feb. 2012)
150,000 New Focus; Planned: New Ecosport, New Kuga
Chongqing Third Plant Construction started in Aug. 2012 350,000
(Operational in the 2nd half of 2014)
Planned: Middle to high class models
Hangzhou Plant, Zhejiang Province Construction started in Aug. 2012 250,000
(Operational in 2015)
Predicted: Lincoln
Nanjing Plant, Jiangsu Province 240,000 240,000 Mazda3xingcheng, Mazda3, New Mazda2, Fiesta; Planned: CX-5
Changan Kuayue Automobile Jiangbei Plant, Chongqing *50,000 *50,000 Crossover, Spruce Leopard, Power Leopard, Star Leopard
Wanzhou Existing Plant, Chongqing
Wanzhou New Plant, Chongqing *150,000
(Started operations in Oct. 2011)
*150,000
Changan Bus Dingzhou Plant, Hebei Province *10,000 *10,000 Buses
Changhe Automobile Changhe
Suzuki
Jingdezhen Plant, Jiangxi province 100,000 200,000 Wagon R, Landy, Ideal A+
Jiujiang Plant, Jiangxi province 100,000 200,000 (2015) Liana, Splash
Hefei
Changan
Automobile
Hefei New Plant *150,000
(Started operations in Nov. 2011)
*300,000
(max. 400,000)
(2nd phase started in 2013, operational in 2015)
Freedom, Fuyun
Hafei Automobile Hafei Motor
(Harbin Plant,
Heilongjiang Province)
350,000 *500,000-600,000 Saima, Lobo, Saibao, Hafei Junyi, Hafei Minyi, Luzun, Minyi Pick-up, Zhongyi Pick-up, Alsvin V3
Weihai Branch office(Weihai Plant, Shandong Province) 50,000
Changan PSA Shenzhen Plant, Guangdong Province Construction started in Nov. 2011 *200,000
(Operational in the middle of 2013)
Planned: DS Line, PSA's Brand, Changan's Brand, Changan PSA's Brand
(Note) 1. Production capacity marked with "*" is production capacity for commercial vehicles or production capacity including commercial vehicles.
2. Jiangling Motors plans to move the production of Transit to Xiaolan Plant by August 2013.

 

CKD sites outside of China

Changan Automobile

Country Business partners Production bases Models
Malaysia Berjaya Corporation Berhad Oriental Assemblers Sdn. Bhd.
Location: Johor Baru
Benni (Local name: ERA CV6), CM8 (Local name: ERA CM8), Chana Star Truck (Local name: ERA Star)
Iran Pars Industrial Development Foundation (PIDF) Joint Venture Production Line Benni
Nigeria PAN Nigeria Limited PAN's Plant
Location: Kaduna
Alsvin

Jiangling Motors

Vietnam Ford Vietnam Ltd. Haiduong Assembly Factory
Location: Nam Sach, Hai Duong
Jiangling Motors exports CKD parts for New Generation Transit

Hafei Automobile

Malaysia Naza Group of Companies Naza Automotive Manufacturing Sdn Bhd (NAM)
Location: Gurun
Lobo (Local name: Naza Forza)
Vietnam Vinamotor Vinamotor's Plant Trucks with one row of seat
Iran KERMAN Group KERMAN's Plant Lobo, etc.

Changan Kuayue Automobile

Vietnam Sanyang Motor Vietnam Co., Ltd.(SMV) SMV's Plant Xinbao
USA Tiger Truck LLC Joint Venture Plant
Location: Poteau, Oklahoma
Star Leopard (Local name: Champ), Chana Star Truck (Local name: Star)

 

Changan Automobile plans to construct new line in Paraguay

 In October 2012, Changan Automobile entered into a contract with a local company for the construction of a new production line in Paraguay. The companies will construct a production line to manufacture CVs under the Changan Motor brand. The local company will also be responsible for the sales of these vehicles establishing a sales network comprised of 27 retail stores including a flagship store within the next two years. This will be the first foreign OEM production line to be constructed in Paraguay.

 

Hafei Automobile to begin KD production in 2014 in Brazil

 In August 2012, Hafei Automobile signed an agreement for technology transfer with an automobile import/export company, CN Auto, in Brazil. Hafei will provide technologies and KD parts and CN Auto will solely invest in the construction of the production line. CN Auto will be responsible for the KD productions as well as the sales of the vehicles. The production line with an annual production capacity of 50K units will be constructed in Espirito Santo, located in the southeast of Brazil by CN Auto. The construction will begin in 2013 on one million square meters of land with production to start in 2014. The first models to be manufactured will mainly be the Hafei Minyi series.
 The automaker has been well received by the local drivers since its entry into the Brazilian market in 2005, making constant growth with the number of vehicles owned currently reaching over 40K units. It entered into a partnership with CN Auto in 2008 and has established a sales network with over 70 stores to date.

 

 



Own brand division to strengthen R&D and aggressively launch new models

Establishment of worldwide R&D structure

 In January 2011, Changan Automobile established its ninth R&D center in the U.S., completing its worldwide R&D structure. The OEM currently has R&D centers for its own brand, running in nine locations in five countries: China (Chongqing, Shanghai, Beijing, Harbin, and Jiangxi), Italy (Torino), Japan (Yokohama), the U.K. (Nottingham), and the U.S. (Detroit). Chongqing is acting as the headquarters of these centers, constructing site-wide plans and integrating its systems. The Shanghai center is responsible for process planning and global recruitment while the Beijing center will work on regulation and law compliances and R&D of new energy technologies. Additionally, centers in Harbin and Jiangxi will help support research and development for its group's brand OEMs like Hafei Automobile and Changhe Automobile.

 Overseas sites will focus on designs (Italy), interiors and exteriors (Japan), powertrains (U.K.), and chassis (U.S.). These nine locations in five countries will collaborate in 24-hour operations to enhance the automaker's R&D structure. Through its worldwide R&D structure, Changan Automobile will strengthen its proprietary development capability while enhancing its corporate core competence.

 

Aims to expand market share by proactively launching new models

 Since the beginning of 2012, Changan Automobile has been proactively launching its own brand models. A total of four brand models, including the Honor, the Eado, and the Alsvin V3, have been introduced by the end of September. Of these models, the Eado, a middle-end sedan launched in March, was the first showcased at the 2011 Frankfurt Motor Show where Changan Automobile was the only Chinese OEM to exhibit at the show. The design was done by the Italy R&D center, interior by Japan, chassis by the U.S. and powertrain by the U.K. The Honor and the Alsvin V3, as well as the Raeton are all engineered through these nine R&D centers to drive market competitiveness by launching its own brand models with global standards.

Changan Automobile's current and scheduled model launches

Passenger Vehicles Release Time Outline
Eado March 2012  A middle-end sedan. The model comes with a 1.6-liter naturally aspirated engine (maximum output of 92kW, maximum torque of 160Nm) under its own powertrain brand, the Bluecore. It incorporates a continuous intake and exhaust variable valve timing mechanism (DVVT) and start/stop mechanism (STT) from Bosch. The fuel economy is 6.2-liters/100km. It may be combined with either a 5-speed MT or Aishin's imported 4-speed AT with manual mode for its transmission. The targeted annual sales volume for 2012 is 45K units and ultimately, 100K to 200K units are expected to be sold in the future. The OEM is planning to provide an addition model with a 1.5-liter direct injection turbocharged engine combined with a DCT in 2013.
Alsvin V3 June 2012  Three years were spent for engineering this entry sedan. The model is powered by a 1.3-liter all-aluminum engine with Multi Point Injection (MPI). Maximum output is 69kW and maximum torque is 121Nm. Its fuel economy is 5.6-liters/100km.
Alsvin V5 September 2012  An economy sedan improved from the existing model, the Alsvin. It is powered by a Bluecore 1.5-liter engine with DOHC and DVVT technologies (maximum output of 84kW, maximum torque of 145Nm). The model comes standard with an on-board information system, In Call, which uses China Unicom's 3G service, the Wo.
CS35 October 2012  The first urban compact SUV solely engineered by Changan Automobile. This is a mass production model of the concept car S101, showcased at the 2011 Frankfurt Motor Show. The model was introduced at the Auto China 2012. It's built on the same platform as the Eado with a Bluecore brand 1.6-liter naturally-aspirated engine like the Eado. A 5-speed MT or Aishin's 4-speed AT with manual mode is available for its transmission. (CS35 with 4-speed AT will be released in early 2013)
Raeton November 2012  A middle-/high-end sedan introduced at the Auto China 2012. 4,920mm×1,825mm×1,500mm (LxWxH) with wheelbase of 2,800mm. It is powered by either a 1.8-liter turbocharged engine or a 2-liter engine with a variable valve timing mechanism (VVT).
Commercial Vehicles Release Time Outline
Honor February 2012  Compact MPV for corporate users. This model is intended for business and commuting for people working at small and medium-sized enterprises. Its biggest competitor is the Wuling Hongguang from SAIC-GM-Wuling Automobile. It comes with a 1.3-liter or a Mitsubishi 1.5-liter engine. The internal noise is low with 42dB during idle mode and 68dB when driving at 80km/h. Its interior space is 3,500-liter and the driver can choose from five, seven, or eight-seater versions.
New Chana Star October 2012  The third generation of the minivan, Chana Star. 3,980mm×1,620mm×1,890mm (LxWxH) with wheelbase of 2,560mm. Equipped with a 1.2-liter engine with maximum output of 72kW and maximum torque of 119Nm. The model will be sold with the current Chana Star series.

Jiangling Motor Holding's current and planned model launches

Passenger Vehicles Release Time Outline
Landwind X5 Early 2013  The first urban SUV to be built on a monocoque body under the Landwind brand (internal code name E31). 4,568mm×1,855mm×1,708mm (LxWxH) with wheelbase of 2,660mm. A Mitsubishi 2-liter turbocharged engine, the 4G63T (maximum output of 130kW, maximum torque of 250Nm) and an 8-speed AT from Shengrui Transmission Co., Ltd. are combined. This is the first Chinese SUV with an 8-speed AT. The vehicle will be launched at the beginning of 2013 after it is introduced at the Auto Guangzhou 2012.

Jiangling Motors' current and planned model launches

Commercial Vehicles Release Time Outline
Yuhu July 2013  A high-end pickup. The body measures 5,325mm in length, 1,828mm in width, 1,710mm in height for its two-wheel-drive version and 5,325mm in length, 1,905mm in width, 1,815mm for the all-wheel-drive version. The wheelbase length is 3,085mm for both versions. Powered with a gasoline engine or a 2.4-liter Ford diesel engine, the JX4D24. The model comes with a Bosch ABS with EBD (8.0 version) as its standard safety equipment.
J10 After second half of 2013  A pickup truck. It is engineered based on a platform used for the current pickup truck models.
N800 2013-2014  A medium-duty truck.
J12 After second half of 2014  A right-hand drive model engineered based on existing pickup truck to expand its market to overseas. The production is planned to start in the latter half of 2014. More than 39.3 million RMB will be spent on this model.

Hafei Automobile's current and planned model launches

Commercial Vehicles Release Time Outline
New Hafei Minyi April 2012  A fully remodeled model of a commercial minivan, the Minyi. 3,735mm×1,510mm×1,890mm (LxWxH) with wheelbase of 2,370mm. Powered by a 970cc engine combined with a 5-speed MT. Its KD production is to start in 2014 in Brazil.

 

 



Joint venture with Ford to make additional investment for launching new models

Chinese government approves the split plan of Changan Ford Mazda

 In August 2012, Changan Automobile, Ford, and Mazda jointly announced that they have received an approval from the National Development and Reform Commission (NDRC) for the separation plan of their joint venture into two.

 The announcement revealed that Ford and Mazda will each create a new joint venture with Changan Automobile with equally-split investments under this plan. With the split, both companies' shareholding will increase from the current three-way joint venture, giving them a stronger voice in the new joint ventures. However, the OEMs still need to go through an approval processes with the appropriate officials, such as the Ministry of Commerce and the State Administration for Industry and Commerce to complete the establishment of these new joint ventures.

Overview of separation plan

Before the companies separate
Name of Corporation Changan Ford Mazda Automobile Co., Ltd.
Investment Ratio 50% by Changan Automobile, 35% by Ford, 15% by Mazda
Location of Head Office Chongqing
Production facilities Vehicles: the Chongqing first, second, and third plants, Hangzhou plant, Nanjing plant *The Chongqing third plant and the Hangzhou plant are currently under construction
Powertrains: Engine and transmission plants being constructed in Chongqing and an existing engine plant in Nanjing (Changan Ford Mazda Engine Co., Ltd.)
Models Ford , Mazda , and Volvo brands
After the companies separate
Name of Corporation Changan Ford Automobile (Changan Ford) Changan Mazda Automobile (Changan Mazda)
Ownership Ratio 50% by Changan Automobile, 50% by Ford 50% by Changan Automobile, 50% by Mazda
Location of Head Office Chongqing Nanjing, Jiangsu
Production facilities (Plan) Vehicles: the Chongqing first, second, and third plants, Hangzhou plant
Powertrains: engine and transmission plants under construction in Chongqing
Vehicles: the Nanjing plant
Powertrains: existing engine plant in Nanjing (Changan Ford Mazda Engine Co., Ltd.)
Models Ford brands Mazda brands
Note 1: The construction of the Chongqing engine plant began in June 2011 in the North New Zone. The production is planned to begin in 2013 with an initial production volume of 400K engines. Added to 350K engines manufactured at the existing plant (Changan Ford Mazda Engine Co., Ltd.), the production capacity of Changan Ford Mazda as a group will reach 750K units.
2. In addition to the engine plant, the construction of a transmission plant began in Chongqing in September 2011. The plant will start productions of 6-speed ATs used on models produced at the Chongqing plant from the fourth quarter of 2013. Its initial annual production capacity will reach 400K units. This is the first transmissions plant for Changan Ford Mazda.
3. The production sites after the separation are based on news reports and are not announced officially. Since Mazda is also investing in the Hangzhou plant, some report that the company the plant will be organized into is still unconfirmed.
4. The Fiesta currently manufactured at the Nanjing plant will be transferred to a Changan Ford plant after the separation.

 

Ford to increase its investment into Chinese market

 Ford announced that it will launch 15 new models, and 20 state-of-the-art powertrains by 2015 in the Chinese market and it is aggressively constructing new plants with its local partners. The construction of engine and powertrain plants began in Chongqing in 2011. In addition to the production starting at the Chongqing second plant in February 2012, the construction of the Chongqing third plant and the Hangzhou plant started in August. The amount invested into these new projects exceeds 3.1 billion dollars.

 Of the 15 new models, the first model, the New Focus, was released in April 2012. The table below is an overview of new models scheduled to be released, including the high-end brand, the Lincoln, which was announced to be launched in the latter half of 2014. It also includes estimates based on media reports.

Ford Brand

Introduction Form Models Release Time Outline
Local Production all-new Ford Focus April 2012  The third generation of the Ford Focus manufactured at the Chongqing second plant. In May 2012, it released the Jingdian Focus, an improved version of the previous Focus, which is now sold along with the old model. The new version targets the high-end share and the old version, the middle-end in the mid-class vehicle market.
all-new Ford Kuga November 2012  The third generation of the compact SUV Ford Kuga (a Chinese model of the Escape). The locally produced model was made public in October 2012 in Beijing. It uses a 1.6-liter or 2-liter EcoBoost turbocharged engine. It is equipped with a telematics system, the SYNC, and a human machine interface (HMI), the MyFord Touch. Expected to be introduced at Auto Guangzhou 2012.
all-new Ford Ecosport Early 2013  The second generation of the compact SUV, the Ford EcoSport. The production will start at the end of 2012 at the Chongqing second plant, and released into the market by early 2013. It is powered by either a 1-liter, 3-cylinder EcoBoost engine or a 1.5-liter engine with a continuous intake and exhaust variable valve timing mechanism (Ti-VCT).
all-new Ford Transit 2015  A fully remodeled Classic Transit. It will be manufactured at the Jiangling Motors' Xiaolan plant in which Ford has a stake of 30% as the second biggest shareholder.
U375 2015  Ford's new SUV built on the T6 platform. The model will be produced at Jiangling Motors' Xiaolan plant.
Import Explorer 2013  A medium-size SUV. It uses a 3.5-liter, V6 engine with a Ti-VCT mechanism. Initially the model will be imported and then switched to a local production at Jiangling Motors in 2015. It will be equipped with an electric control system, the Terrain Management System, which allows the driver to select an optimized setting for the all-wheel-drive.
All-new Ford Focus ST 2013  The third generation of the Ford Focus ST, showcased at the 2012 Auto China for the first time in Asia. This is the high performance version of the Ford Focus. Powered with a 2-liter, 4-cylinder EcoBoost engine, combined with a 6-speed MT. The model will be manufactured at Ford's Germany plant and exported to the Chinese market.

Lincoln Brand

Introduction Form Models Release Time Outline
Import MKZ/MKS/MKX/MKT/
Navigator
The second half of 2014  It is reported by the media that these five models will be released. Of these five, the MKZ is most likely to be manufactured locally.

Note: In addition to the models above, the local media reports that Ford is planning to introduce fully remodeled versions of the Mondeo and S-Max, a face-lifted/fully remodeled version of the Fiesta, and a locally produced version of the Edge. In addition to the existing models, new models such as the Ka (based on the concept car, the Start), Taurus, Mustang, B-MAX, C-MAX, Galaxy, and Flex are also expected.

 

Ford to enter into truck market

 In August 2012, Jiangling Motors, which Ford owns 30% as the second largest shareholder, announced that it will merge Chang'an Heavy Vehicle (Taiyuan in Shanxi Province) into its group. With this merger, Chang'an Heavy Vehicle, previously directly owned by Changan Automobile Group (owned 80% by Changan Automobile Group and 20% by China South Industries Group Corporation), will become Jiangling Motors' wholly owned subsidiary. Jiangling Motors is thought to have received much support from Ford with this merger, and the media reports that there is a high possibility that Ford trucks will hit the Chinese market in the future.

 



Joint venture with PSA begins import sales of DS Line

 In November 11, Changan Automobile Group and PSA established a joint venture, Changan PSA Automobiles Co., Ltd. (Changan PSA) in Shenzhen, Guangdong Province. The capital funding of four billion RMB will be split equally by the two companies. The company currently sells Citroen's high-end series, the DS Line, only, and the local production is scheduled to begin in mid-2013. Both companies feel that the current car owners in China, especially in the high-end segment, are more focused on originality, and aim to expand its market share with the release of the DS Line characterized by its unique design.

Model launch plans

First phase: Import sales  The import sales of the B-class DS5 and the A-class DS4 began in June 2012, and A0-class DS3 in September. This was the first time Citroen's DS Line was launched into the Chinese market.
Second phase:
Local production
 By mid-2013, the productions at the vehicle plant will start with the local production of the DS Line. The scheduled initial local production rate is 50%. The production will begin with the DS5 terminating the import after the manufacturing starts locally.
Third phase: Launching of existing and new brands  Changan Automobile Group and PSA's group brand and Changan PSA original brand models are planned to be released in the future.

Organizing production facilities

Vehicle Plant  Changan PSA took over Hafei Automobile's Shenzhen plant, which terminated production in June 2007, to establish a new production site based on this plant. Its property reaches 1,300,000 square meters with the addition of a newly acquired industrial site. It is reported that the production facilities for the DS Line will be newly constructed and the Hafei Automobile's existing facilities and land will be used for the production of joint venture's own brands. The plant will be ready and start production with an initial annual capacity of 200K vehicles by mid-2013.
Engine Plant  The construction of this plant began in May 2012 south of the vehicle plant. The plant will be built on approximately 24,500 square meters of land. Four machining lines and an assembly line will be built in the first phase of the construction. Its planned initial annual production capacity is 200K units.
R&D Center  A new R&D center is currently under construction along with the vehicle and the engine plants. It will share technical resources with the existing R&D centers of Changan Automobile Group and PSA.

Establishment of sales network

 Since opening a specialized store, DS Store, in June 2012 in Nanjing, nine new stores have been opened in cities including Shenzhen, Shanghai, and Guangzhou. 24 more DS Stores are planned to be opened in 24 major cities by the end of 2012. Then, it will expand its sales network to 80 stores in 55 cities by the end of 2013, 130 stores in 75 cities by the end of 2014, and 200 stores in 111 cities by the end of 2015. Its goal is to reach production and sales volumes of one million units by 2020.

 

 



Production and sales of joint ventures with Japanese OEMs (Suzuki and Mazda) affected by anti-Japanese protests

 Due to anti-Japanese protests in September, Changan Suzuki's Chongqing plant cut production, limiting it to the daytime only. Chongqing Ford Mazda's Nanjing plant, which produces Mazda brand vehicles, went into a break for the National Day of the People's Republic of China two days earlier, explaining that the shutdown was to prepare for the production of the CX-5 scheduled to be launched in 2013. On October 8, the day the break ended, both plants were confirmed to have started normal operations, but the situation continues to be uncertain.

 With the downfall of all Japanese brands, sales volumes on a single month basis for September dropped for both Mazda and Suzuki's joint ventures. The sales volume for Changan Suzuki dropped 48.3% y/y to 10,649 and that for the locally produced Mazda2 and Mazda3 dropped 27.7% to 4,299 units for Mazda (data based on factory shipments).

 Despite the slow sales, Mazda released face-lifted vehicles, and Suzuki released new models in October. The table below is a summary of launching plans of new models by both companies.

Mazda' current and planned model launches

Models Release Time Outline
New Mazda2 October 2012  A face-lifted version of the third generation of the Mazda2 (Demio in Japan). Its face design has been changed with a wider front grille. The model was pre-released on September 22 in Jiangsu Province where its Nanjing plant is located.
CX-5 2013  A crossover SUV with a new generation of technology, SKYACTIV TECHNOLOGY. The model was first introduced in China at 2012 Auto China. The import sales of this vehicle has already begun in July though Changan Ford Mazda's sales networks and the local production is set to begin in its Nanjing plant in 2013.
New Mazda3 2014  The third generation of the Mazda3 (Axela in Japan). It is reported that it will be introduced outside of China in mid-2013 and the local production to begin in China by 2014.

 

Suzuki' current and planned model launches

Models Release Time Outline
Beidouxing X5 October 2012  A crossover compact car based on the existing Wagon R produced at Changhe Suzuki. 3,664mm×1,610mm×1,722mm (LxWxH) with wheelbase of 2,485mm. Its interior space is 3,230-liters with a luggage space of 890-liters. Powered with a 1.4-liter K14B (maximum output of 70kW and maximum torque of 112Nm) engine combined with a 5-speed MT.
Ertiga n.a.  A seven-seater MPV. Media reports that it may be locally produced at Changan Suzuki.

Note: Changan Suzuki will launch seven new models including the Ertiga, an SUV, and a B-class vehicle by 2015.

<Automotive Industry Portal MarkLines>