Changan Automobile: Aiming for sales of 3.4 million own brand vehicles in 2025
Focusing on new energy vehicles and smart cars
China Changan Automobile Group Co., Ltd., one of China’s four major automobile company groups, iproduces and sells automobiles; manufactures engines and parts; and engages in trade and other services.
One of its group companies is Chongqing Changan Automobile Co., Ltd., which handles automobile manufacturing, and not only produces own brand vehicles, but also operates joint ventures with a number of foreign companies. It is an OEM that is growing its own brands rapidly in China.
The Changan Automobile Group was founded as the “Shanghai Foreign Gun Bureau” 1862. It was later renamed “Changan Equipment Manufacturing” and eventually became Changan Automobile Group as it is known today. “China Changan Automobile Group Co., Ltd.” is a subsidiary of the China South Industries Group Corporation, which is involved in the arms industry.
In 2010, Changan Automobile Group’s automobile sold (vehicle shipments from its plants) approximately 2.298 million vehicles, but between 2011 and 2012, sales dropped to below 2 million units. This can be attributed to the government cancelling its sales promotion measures (replacement incentive packages, automobile popularization measures in rural areas) at the end of 2010, and anti-Japanese sentiment in 2012 that affected sales of Japanese OEMs the automaker has joint ventures with. After 2013, Changan Automobile Group’s sales have steadily increased to exceed 2.5 million units in 2014. In 2015, the group sold roughly 2.788 million vehicles, making it the fourth largest automaker in the Chinese market.
Sales during the first half of 2016 (January to June) saw SUV models such as the CS75 and CS35, as well as MPV models such as the Honor and Oushang, coming in the top 10 of the rankings for their respective segments, with sales figures increasing to approximately 1.49 million vehicles. As a result, Changan Group outperformed FAW Group to become the third largest carmaker. For 2016, the OEM has set a goal of 2.95 million vehicle sales for its group as a whole.
At its 150th anniversary commemoration event in November 2012, Changan Automobile Group declared that it had set a sales target of 6 million units by 2020, of which 60 to 70% of its sales would be composed of own brands. However in 2015, the OEM has made downward adjustments, and its current group sales target through 2020 has been revised to 4.5 million vehicles, with 2.47 million to be own brands.
Changan Automobile Group’s goal for 2025 is to have sales of 6 million for its group as a whole, with 3.4 million vehicles from own brands. The group also aims for its own brands to come in the top 10 globally.
Correlation diagram of Changan Automobile Group's major group companies (% are investment ratios)
Medium to long term plan: Focus on own brands, aim to enter the global top 10 by 2025
Changan Automobile Group views the years leading to 2020 as an opportunity for development, and will focus on developing its own brands and accelerating its branding. Specifically, the group has set an ambitious goal to increase its sales from 1.62 million vehicles in 2015 to 2.47 million by 2020, and 3.4 million by 2025.
In order to achieve this sales target, the group will develop new energy vehicles and smart cars on a global scale. As of 2016, there are roughly 10 thousand staff members working on research and development, and the group will continue to add more.
As for its overseas strategy, the group aims to have its own brands in the global top 12 by 2020, and announced it is gradually developing markets. As of December 2015, the group has sales subsidiaries in only Russia and Brazil, and in 2016, it began research for making investments in India.
Aim to become a world-class group in technology, quality, and brand size by 2025
(Source: Created by MarkLines based on various reports)
Major measures are as follows.
|Vehicle sales target||Year||2016||2017||2020||2025|
|Group total (Units)||2.95 million||3.5 million||4.5 million||6 million|
|Own brands (Units)||-||1.98 million||2.47 million||3.4 million|
|Global sales ranking||Top 15 as of July 2016||Top 15 entry||Top 12 entry||Top 10 entry|
|New energy vehicle strategy||・The group aims to sell a total of 400 thousand new energy vehicles by 2020, and 2 million by 2025. In 2015, the group sold approximately 8,700 new energy vehicles.|
|・The automaker will invest CNY 18 billion in research and development for new energy vehicles by 2025. Research and development facilities are located in Chongqing, Beijing, the U.S., and the U.K., and global staff members exceed 1,500 people. Production will take place in Chongqing, Beijing, Baoding, and Shenzhen.|
|・The OEM plans to release 34 models (27 EV models, seven PHV and HV models) by 2025.
・The EV models will consist of twelve commercial vehicles, six MPVs, two SUVs, and seven sedans.
|Overseas strategy||・In September 2016, the OEM began knock-down kit production of the CS35 compact SUV in Russia. The carmaker aims to achieve a local procurement ratio of 50% in the next four to five years.
・The CS35 will be released in the fourth quarter of 2016 via Changan Automobile dealers.
|・In January 2016, the group began research for investing in India. Knock-down production will begin by 2020, with annual production of 200 thousand vehicles planned. Tamil Nadu, Andhra Pradesh, and Maharashtra have been cited as potential sites for production facilities.|
|Intelligent strategy (654 strategy)||・In 2015, Changan announced its 654 strategy for the development of smart cars. Specifically, the group will create six system platforms and five core technologies by 2025, and work to fully autonomous driving in a four stage process starting from single intelligence.
・The research and development team, which has roughly 1,500 members, will handle technological and product development. A total of CNY 13 billion will be invested by 2025.
|・The six system platforms will apply electronic and electrical devices, software, testing environments, standard regulations, rulings by the central government, and environmental laws and regulations.
・The five core technologies consist of automated parking, adaptive cruise control, intelligent internet, Vehicle-to-Everything (V2X), and Human Machine Interface (HMI) technology.
|・The group will pursue this goal in four stages. Level 1 in 2015: assisted driving (automation of singular functions); Level 2 in 2018: semi-autonomous driving (automation of multiple functions); Level 3 in 2020: advanced automated driving (autonomous driving under specific traffic conditions); Level 4 in 2025: complete automated driving.|
Plan by OEM： Releasing a number of own brand and joint venture SUV models
Changan Automobile Group has joint ventures with four foreign companies: two Japanese companies (Mazda and Suzuki), Ford, and PSA.
Of its total sales of 2.79 million in 2015, the group sold approximately 1.17 million vehicles from foreign joint venture brands, and 1.62 million Changan Automobile brand vehicles.
In the second half of 2016, Chongqing Changan Automobile has continued to release SUVs, which are popular in China. It is also planning to release a compact sedan that will be subject to tax reductions by the end of 2016. Regarding investments and projects, the group will advance its automated driving and smart car tech, and actively involve itself in government agency projects, along with other ventures including collaboration with other companies.
Jiangling Motors, a joint venture with Ford, has applied its technologies developed for commercial vehicles to SUV models, and in 2016, the OEM released small and medium-size SUVs. The automaker plans to release a new energy vehicle utilizing Ford’s technology in 2018.
The various joint ventures will release new models with a focus on SUVs. Changan Ford’s plan to open a testing center by 2020 and Changan Mazda’s implementation of a revolutionary production process (April 2016) are two examples of OEMs actively making investments to increase sales in the Chinese market.
(Source: Created based on MarkLines' database)
(Source: Created based on MarkLines' database)
Note）In November 2012, Changan Ford Mazda Automobile Co., Ltd. was divided into two separate joint ventures: Changan Mazda Automobile Co., Ltd. and Changan Ford Automobile Co., Ltd.
Chongqing Changan Automobile：Several models released in 2016, various projects begin
|2016 sales target
800 thousand own brand vehicles
|・The group’s sales target for own brands in 2016 is roughly 800 thousand vehicles.
・Between January and June 2016, approximately 620 thousand own brand vehicles were sold.
|2016 model plans||In response to the preferential policy for vehicles with an engine displacement of 1.6L that will last until the end of 2016, the company is releasing small-sized models.|
|SUV||April||Release of the CS15 small SUV.|
|April||Unveiling of the flagship CS95.|
|The model features a 2.0 liter Gasoline Direct Injection (GDI) turbo engine.|
|Q3||Release of a 1.5 liter version of the CS75 mid-size SUV.|
|Sedan||July||Release of a new version of the bestselling Eado sedan. It features either a Blue Core 1.6L or 1.6L GDI engine.|
|September||Release of the Alsvin V7 compact sedan.|
|The vehicle features a 1.0 liter turbo engine. Prices start from CNY 68.9 thousand.|
|New energy vehicle||October||Release of the Benni compact EV hatchback.|
|Q3||Release of the Eado PHV.|
|Commercial vehicles||The group is aiming for commercial vehicles sales of 600,000 units and a market share of 13.8% in 2016. It sold 333,000 units in 2015. (The commercial vehicles division handles the Oushang, Honor, Eulove, and CX70, which are models in the Changan Stars series.)|
|2017 model plan||・A total of four models are planned for release: the CS95 large SUV, CS55 mid-size SUV, a mid-size sedan, and an MPV model.|
|Autonomous Driving||・In April 2016, a successful level-3 long-distance autonomous driving test run on public streets was reported.
・The test vehicle drove approximately 2 thousand kilometers for a total of six days from Chongqing to Beijing and reached a maximum speed of 120km/h. The vehicle was tested at level-3 automated driving for its ability to track vehicles driving ahead of it at all speed ranges, assistance during traffic congestion, lane keeping, recognition of traffic information, and lane-change abilities.
|・The group will aim to achieve advanced level-2 autonomous driving technologies and implement them in 2018.|
|Smart car venture with Baidu||・In March 2016, the group signed a strategic alliance agreement for smart cars with Baidu, China’s largest search engine.
・The project is aimed at using Baidu’s technology platforms CarLife, MyCar, and CoDriver to provide better HMI solutions and ride experiences to users. CarLife connects smartphones and vehicle-mounted devices, MyCar allows users to check car conditions via smartphone, and CoDriver enables voice interactions.
・In July 2016, a ceremony was held in Shunde, Guangdong Province, to commemorate the delivery of 81 Changan testing vehicles produced through the strategic alliance between Baidu and Changan Automobile.
|Smart city project||・In January 2016, the Ministry of Industry and Information Technology and Chongqing city, where Changan Automobile Group’s headquarters is located, agreed to a model project involving smart cars and smart traffic that utilizes broadband mobile internet.|
|・Changan Automobile will collaborate with the China Automotive Engineering Research Institute on the project. Changan Automobile boasts a testing course and other testing facilities for smart cars, and has implemented test runs for automated driving on the plant premises. It has also developed roughly 60 smart technologies. Furthermore, Changan Automobile is the first Chinese automaker to become a member of the University of Michigan’s Mobility Transformation Center, which allows it to use the testing grounds at Ann Arbor, Michigan, for technical testing of V2X technology.|
|Four platforms||・Platforms for future model are currently being readied. A total of four platforms for passenger vehicles are planned: the P1, P2, P3, and P4.
・The P3 will be Changan Automobile’s standard platform. The all new Eado, scheduled for release in 2017, will feature the P3 platform.
・The P4 platform will be used for high-end sedan models and SUVs.
|・Four models will be developed for each platform.|
|Construction of a new R&D center||・Construction of the Chongqing Global R&D Center began in June 2015. The facility is scheduled for completion around December 2016 or early 2017. Approximately CNY 500 million was invested in the first phase of construction.|
|・The Center will undertake comprehensive research and development for engines, exteriors, and interiors.|
|Investments in a battery manufacturer||・In February 2016, Changan Automobile Group invested in Corun Hybrid System (CHS), a company that manufactures hybrid drive systems and batteries. CHS is a joint venture of Hunan Corun and the Geely Group, and was established on November 25, 2014.|
|・CHS’s powertrain will be featured in PHV versions of the Eado and CS75.|
|Increased production at passenger vehicle plant||・In May 2015 a commencement ceremony was held for the Yuzui Plant. CNY 5.8 billion will be invested, and the plant is to have an annual production capacity of 240 thousand units. The group plans to produce models including the Eado sedan and Eado EV there.|
|2nd phase of construction for MPV plant||・The group already plans to invest CNY 2.5 billion in the construction (2nd phase) of an MPV production facility at the Yuzui Plant in 2016. A number of MPV models are to be produced there from 2017.|
|e-commerce||・In April 2016 the Changan Mall e-commerce site opened on the Changan Motors website.|
|・At Changan Mall, users can reserve the CS15, purchase car insurance and accessories, and customize reserved vehicles (interior color, wheels, etc.).|
|Export quality and safety model company||・In May 2016, The General Administration of Quality Supervision, Inspection and Quarantine, a department of that oversees the quality of import and export goods, certified the group (eight plants under Changan Automobile in Beijing/Chongqing/Hebei Province) as a “Chinese export quality and safety model company.”
・Thanks to this certification, the group is exempt from inspections when exporting assembled vehicles or importing production equipment and parts (excluding particular items).
|ISO26262 certification||・In June 2016, Chongqing Changan New Energy Automobile Co., Ltd. became the first Chinese OEM to be certified with the ISO26262 international standard for safety features.|
Jiangling Holdings：Appealing to young people with compact SUV models
|2016 model plans Release of SUVs||・In April 2016 at the Beijing Motor Show, the Yusheng S330 urban SUV was unveiled for the first time. It features a 1.5L GTDI engine and is scheduled for release in late September 2016.|
|・The Yusheng S350 SUV was released in June 2016. The vehicle features a 2.0L GTDI engine.|
|New energy vehicles utilizing Ford technology||・The OEM plans to release new energy vehicles that utilize Ford’s new energy vehicle technology in 2018. The vehicles will use existing platforms and be produced at the Nanchang plant.|
Changan Ford：New models releases with a focus on new energy vehicles and SUVs
|Model plans/sales plans
Target for 2016 set at 1 million vehicles
|・Between 2016 and 2020, the carmaker plans to release 20 models in the Chinese market, with a focus on new energy vehicles and SUVs. 15 new energy vehicles are planned. For SUVs, a broad range from compact models to high-end models will be released.|
|・The sales target for 2016 is 1 million vehicles.|
|・In May 2016, the Tourneo MPV was released.
・In the second half of 2016, an HV model of the the Mondeo D segment sedan will be released.
・The C-MAX Energi PHV is scheduled for release in the first half of 2017. (Imported)
|Opening of a testing center||・CNY 11.4 billion will be invested in research and development for developing smart car technology through 2020. In addition to expanding its research and engineering facility in Nanjing, the OEM will construct a testing center roughly 80 km from the current research center in the same city. The testing center will feature a test course.|
|Project with major ridesharing company||・Changan Ford began a “City Ride Project” with the Chinese ridesharing company DidaPinche. Ford recruited drivers of its vehicles registered with the DidaPinche app in Beijing and Shanghai, which were designated as model cities, and users (registered with the app) shared rides in the morning and evening commute hours. There were 170 thousand users in the two cities.|
Changan Mazda：Healthy sales thanks to tax breaks, China-exclusive model scheduled for release in 2017
|Sales plans/model plans
China-exclusive model to be released in 2017
|・Sales (shipped vehicles) from January to July 2016 saw a 13.7% y/y increase of roughly 104 thousand vehicles. Sales of the Mazda3 rose thanks to the tax break applied to passenger cars with an engine displacement of 1.6L or less that went into effect from October 2015.|
|・The 2017 sales target is for 3 million vehicles.|
|・A China-exclusive model is planned for release in 2017.|
|Implementation of water-based paint technology||・In April 2016, Mazda’s original “Aqua-Tech Paint” water-based paint technology was implemented at Changan Mazda.|
|・Thanks to innovations in painting processes, the resource efficiency of paint and energy has been dramatically improved, simultaneously reducing VOC emissions and CO2 emissions, which previously had resulted in a tradeoff where reducing one would increase emissions of the other. The introduction of the technology will be the second time Mazda has done so following its Ujina first plant in Japan.|
Changan Suzuki：Release of models featuring “Boosterjet” engine
|Model plans||・In August 2016 an S.CROSS compact SUV featuring the newly developed “Boosterjet” 1.4L direct-injection turbo engine was released. The vehicle has a maximum output of 103 kW and a maximum torque of 200 Nm.|
|・In September 2016, the new Alto was announced at the Chengdu Motor Show.|
|・Release of the Ignis compact crossover car is scheduled for 2017.|
|Alliance with Didi Chuxing||・In September 2016, a business partnership signing ceremony for test drives and marketing was held with Didi Chuxing. Changang Suzuki will offer test drive opportunities to users in Beijing, Guangzhou, Shenzhen, Hangzhou, and Chengdu by providing S.CROSS vehicles to Didi Chuxing.|
Changan PSA：Production of DS brand vehicles, sales slump in the first half of 2016
|DS brand||・Production of DS brand vehicles began in 2013. The company invested CNY 900 million in the Shenzhen Plant, and a facility with an annual production capacity of 200 thousand vehicles was constructed.|
|・Changan PSA sold approximately 23 thousand vehicles in 2014 and 24 thousand in 2015. Between January and July 2016, the OEM sold roughly 9.4 thousand vehicles for a y/y decrease of 39.6%.|
|・The DS 4S hatchback made its world premiere at the Beijing Motor Show held in April 2016.|
|・The DS 4S is available with a THP 130, THP 160, or THP 200 engine. The model is larger than its European counterpart, with a length of 4435 mm, width of 1843 mm, and height of 1510 mm.|
Production capacity at major Changan Automobile Group plants
|Chongqing Changan||Chongqing plant||Jiangbei plant||*300||*300|
|Jiangsu Province, Nanjing plant||*300||*300|
|Hebei Province plant||*300||*300|
|Jiangling Holdings||Landwind||Changbei plant||200||300|
|Jiangling Motors||Jiangxi Province existing plant||*200||*200|
|Jiangxi Province, Xiaolan plant||*300||*300|
|JMC Heavy Duty Vehicle
(Shanxi Province, Taiyuan plant)
|Chongqing first plant||250||250|
|Chongqing second plant||250||500→750(2020)|
|Chongqing first plant||250||250|
|Chongqing second plant||350||350|
|Chongqing third plant||360||360|
|Zhejiang Province, Hangzhou plant||250||500|
|Heilongjiang Province, Harbin plant||200||200|
|Changan Mazda||Jiangsu Province, Nanjing plant||220||220|
|Changan PSA||Guangdong Province, Shenzhen plant||200||200|
|Baoding Changan Bus||Hebei Province, Dingzhou current plant||*85||*85|
|Hebei Province, Dingzhou new plant|
|Changan Kuayue||Chongqing Wanzhou plant||*200||*200|
|Hafei Changan Automobile||Anhui Province, Hefei plant||*150||*400|
(Heilongjiang Province, Harbin plant)
(Shandong Province, Weihai plant)
|Production of Changan Ford models planned from 2016|
(Source: MarkLines database, created from various reports 2016.9)
Note) Data with a * mark indicates commercial vehicles, or production capacity including commercial vehicles.
Changan Automobile Group sales numbers in China (factory shipments)
|Mini Van||Changan Jinniuxing||57,450||31,301||23,084||14,403||5,312|
|Changan Star 4500||28,174||21,011||18,291||11,445||2,282|
|Changan Star 3||0||0||21,769||12,676||27,754|
|Changan Star 7||0||0||0||0||1,945|
|Changan Star 9||0||0||0||0||9,859|
|Changan Star 2||129,415||134,756||94,651||61,256||6,271|
|Changan Star S460||7,258||0||0||0||0|
|Hafei Changan Automobile||SUV||CS15||0||0||40||0||31,252|
|Mini Van||Changan Star||52,933||29,700||0||0||0|
|Baoding Changan Bus||Light trucks||15,125||17,045||24,079||16,689||20,349|
|Jiangling Holdings||MPV||Landwind Fengshang||278||318||226||226||0|
|Jiangling Motors Group Light Vehicle||Light trucks||0||7,018||9,018||5,381||6,019|
|Jiangling Group Jingma Automobile(fromer JInagzxi Fire Reeds Manufacturing Plant)||Light trucks||42||40||4||2||0|
|Small Buses (Chassis)||123||32||89||72||68|
|JMC Heavy Duty Vehicle(Taiyuan Changan Heavy-duty Truck)||Semi Trailer (Under25t) (JMC)||64||0||0||0||0|
|Hafei Motor (Hafei)||Sedan/ Hatchback||Lobo||1,166||400||0||0||0|
|Jiangxi Changhe Suzuki
|Jiangxi Changhe Automobile Liability
|Own brands (Include Hafei Motor bland)||Total||1,360,760||1,467,590||1,621,644||973,031||1,015,274|
|Volvo Cars S80 (2011-) *2||3,735||4,385||2,975||1,406||0|
|Joint venture brands||Total||899,985||1,089,387||1,166,425||661,736||667,636|
(Source: Created based on MarkLines' database)
Note）*1: In 2013, Changhe Automobile was reorganized to be part of the BAIC Group.
*2: Sales of the Volvo S80 ended in 2015. The successor model S90 is produced by Geely Automobile.
Sales forecast by LMC Automotive: Changan Group is mild growth and reach 1.58million units in 2019
(LMC Automotive,Q3. 2016)
According to LMC Automotive’s forecast released in Q3. 2016, Changan Group sales are expected to be 1.44 million units in 2016, up 10.3% year-over-year (y/y). After 2016, Changan Group will continue to have mild growth and reach 1.58 million sales units in 2019.
Changan Group’s global sales declined by 1% in Q1 2016, lower than the global market average. China is Changan Group’s home market, with over 99% of its regional sales taking place in the country, while a very small proportion in Malaysia.
Sales of the group’s Light Vehicles in China were modest in Q1 2016, rising by just 0.9% Y o Y. Sales of its SUVs soared by 34.3% Y o Y Q1, thanks to the success of the CS35 and CS75. In contrast, Changan’s Car segment crashed, with sales plunging by 22.3% Y o Y in Q1 2016 as the boom in SUV volumes impacted the segment. The group’s van line-up continued to suffer, with sales falling by 25.1% Y o Y in 2016, largely as a result of its Mini Bus models, which felt the impact of the segment’s slow momentum.
Changan is set to introduce a number of new products in the thriving SUV and MPV segments, including the new CS15 and CX70, both of which will enhance the group’s strength in the SUV market. We expect that Changan Group will continue to enjoy double-digit growth through the course of 2016 despite the increasingly fierce competitive environment in these two key market segments. The SUV segment is set to overtake its Car and MPV segments to become its highest-selling segment from 2016 onwards. Indeed, we project that Changan’s SUV segment will have a share in excess of 40% of the group’s total sales.
Boosted by the introduction of these new models, as well as China’s latest stimulus policies, we expect the group to maintain favorable growth in 2016. However, once the incentive measures expire, we project mild growth for the group across the long-term forecast window.
Changan Automobile Group vehicle sales forecast by make (LMC Automotive, Q3. 2016)
|Changan Automobile Group||Changan||870,719||958,326||1,096,884||1,262,795||1,310,382||1,377,526||1,434,447|
|Changan Automobile GroupTotal||994,471||1,142,924||1,308,415||1,443,018||1,460,671||1,520,534||1,576,299|
Source: LMC Automotive "Global Automotive Production Forecast (Q3. 2016)"
(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.
- All rights reserved. Reproduction of any data will require permission of LMC Automotive.
ADAS, Autonomous driving, New energy vehicle, Smart car, Ridesharing
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