Lifan: Twenty-one NEV models by 2020, targeting production volume of 300,000 units

Plans to establish plants for NEV-related products including batteries

2017/12/20

Summary

SUV model Myway

Lifan, a medium-sized OEM headquartered in Chongqing, is a privately-owned company of the Lifan Industry (Group) Co., Ltd. group (referred to below as the Lifan Group), which only develops Lifan brand vehicles while many Chinese OEMs are joint ventures with foreign OEMs. The Lifan Group began as a manufacturer of motorcycles in 1992. It later entered the automobile industry. Lifan discontinued production of its compact sedan in 2004. Unit sales of Lifan Motors were 272,000 units, down 1.4% year-over-year (y/y) in 2016, showing negligible growth. During January - October, 2017, sales increased by 18.0% to 223,000 units, with the MPV Xuanlang and its commercial vehicle models contributing to the increase. In 2016, the sales volume of the New Energy Vehicle (NEV) was as low as several thousand units. Lifan is reinventing themselves as a new company at a rapid pace, creating an organization that includes battery-related projects. It is confident it will be able to meet its production target for NEVs of 300,000 units by the end of 2020.

Lifan Motors accelerated its overseas development around 2010. In particular, in the Russian market it boasts the largest sales volume of any Chinese OEM. In 2015, it announced plans to build a wholly-owned plant in Russia. It also entered the car sharing services business in Russia in November, 2017.



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Overview of Lifan: Evolving from a motorcycle to an automobile business, expanding their lineup of SUV/MPV models

Lifan Motors is a medium-sized private OEM headquartered in Chongqing. It develops only Lifan brand vehicles while many other Chinese OEMs have joint ventures with foreign OEMs that develop vehicles for the joint venture's brand models. Lifan Motors was founded as a motorcycle manufacturer in 1992. It currently manufactures and sells automobiles and engines, and operates a financial services business. It was listed on the Shanghai Stock Exchange in 2010. The automotive division of the Lifan Group acquired the "Chongqing Special Vehicle Chief Factory" and founded Lifan Motors in 2003. The production of its compact sedan was discontinued in 2004. The motorcycle business' operating revenue in 2016 was CNY 16.388 billion, making it the largest manufacturer of motorcycles in China. Lifan has also expanded its market presence overseas.

Sales of Lifan Motors in 2016 decreased by 1.4% y/y to 272,000 units, showing negligible growth. During January - October, 2017, sales increased by 18.0% y/y to 223,000 units. The MPV "Xuanlang" and its commercial vehicle models contributed to the increase. Although Lifan Motors already had a high proportion of commercial vehicles, which was in the 30% range until 2014, that ratio increased to over 50% in 2015 and 63% in 2016.

In 2016, Lifan introduced the Myway, Xuanlang, and Lotto models as part of their "7-seat MPV strategy targeting families." Lifan is aiming to increase the sales volumes of these models by considering factors such as current trends, the young generation, connectivity, and vehicle utility.

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Lifan motors major models


Gasoline car
Lifan series SUV X50, X60, X80
Sedan 820
Mini Van Foison
7-seat MPV/SUV Lotto, Xuanlang, Myway
EV Low-speed series 100E, 280E, 320E DX/BX, C30E
High-speed series 320EV, 330EV, 620EV, 650EV, 820EV

 

Lifan X80  Lifan 820EV
Lifan X80

Lifan 820EV



Mid/Long-term Goals: Twenty-one NEV models by 2020, aiming for production of 300,000 units

According to Lifan Motors, the carmaker will concentrate on NEV businesses during the 13th Five-year plan period (2016-2020). To be specific, Lifan announced that it will produce 300,000 NEVs and introduce 21 EV and PHV models by the end of 2020. It will also build battery exchange stations, manufacture batteries, and implement rental/leasing services for NEVs, as well as to execute its plan to introduce a number of new NEV models. In October, 2017, the OEM increased its capital investment in PandaAuto, which handles car sharing services for the group. In November, it partnered with PandaAuto and Baidu, becoming a partner in the "Apollo" open-platform initiative. As a result, the automaker will jointly be promoting the adoption of unmanned driving in the area of car sharing.


Plan until 2020
 Introduce 21 EV/PHV models to market. Among these, a new compact SUV EV will be released in 2018. It also plans to introduce about five NEVs within the next 2 - 3 years.
 Target production of 300,000 NEVs with total sales of 500,000 units by the end of 2020.
 Target the development of NEVs with a range of 100km on an 8kW charge, with 2L/100km total energy consumption, and a three minute battery changing time.
 Target to construct more than 500 battery exchange stations in all major Chinese cities.
 Start rental/leasing services in Chongqing, Shanghai, and Henan. Develop NEV rental/leasing services for individual customers, and introduce an internet platform for ride sharing services companies and organizations.
 Target 300,000 rentals/leases annually by 2020.
 Promote overseas expansion and globalization.


Establishment of NEV-related companies and the battery production project

According to the 2016 annual report of the Lifan Group, sales of Lifan Motor's New Energy Vehicle (NEV) decreased significantly by 78.9% y/y to 1,455 units, and sales of their low-speed EVs *1 decreased by 40.4% y/y to 2,888 units. The EVs are currently assembled mainly at their plant in Henan Province. The plant will have a production capacity of 100,000 units when the second phase project has been implemented. In April 2017, "Chongqing Lifan New Energy Automobile Ltd." was newly established as a wholly-owned subsidiary of the Group, which will conduct R&D, design and sales, as well as the assembly of NEVs. In 2016, Lifan also announced the new establishment of a new production line for batteries, and established a joint venture company for parts such as EV powertrain control units.

*1. Legislation regarding low-speed EVs and EVs with a maximum speed of 70 km/h are being considered.

Establishment of a NEV-related companies Henan Lifan New Energy Electric Vehicles Co., Ltd.  Henan Lifan New Energy Electric Vehicles Co., Ltd., a wholly owned subsidiary, was established in August, 2014. The registered capital is CNY 30 million. It handles production and sales.
 Lifan announced a NEV project in mid-December, 2014. The investment amount is CNY 2.2 billion. Annual production will be 100,000 units after the completion of the second phase. Production of the 320E and 300E was discontinued at the end of December, 2014.
Chongqing Lifan New Energy Automobile Co., Ltd.  A wholly-owned subsidiary of the Lifan Group, Chongqing Lifan New Energy Automobile Co., Ltd. was established in April, 2017, and announced at the end of 2016. The registered capital of the JV is CNY 1 billion.
 The JV will conduct the R&D, design, production, and sales of NEVs.

 

Battery production project  In February 2016, the registered capital of Wanguang New Energy Technology Co., Ltd., a wholly-owned subsidiary of the Lifan Group, was increased from CNY 20 million to CNY 920 million, and assumed responsibility for the R&D, manufacturing, and sale of products related to rechargeable batteries.
 The project, with a total investment of CNY 1.55 billion, has started operations in the high-tech park in Chongqing Liangjiang New Area. Ten lines for the production of lithium battery cells have been built and the R&D and sale of battery cells are being conducted. The capacity of the battery cell production lines corresponds to 6 billion kWh.
Establishment of a joint venture for EV related parts  A joint venture with Hiboridd Automotive Technology was established for EV related parts and powertrains in May, 2016.
 The joint venture produces EV control units and PHV powertrain control parts, etc. for Lifan Motors.


Overseas expansion of Lifan Motors: Actively expanding operations in Russia

The overseas expansion of Lifan Motors has accelerated since 2007. Sales volumes in Russia had decreased in part because of the temporary market downturn. However, sales volumes in 2016 were 17,000 units, representing an increase of 15.4% y/y, returning its operations to profitability. The company now has become the top-selling automaker in Russia.

Production in Russia started in 2007 by partnering with Derways, which conducts KD production for a number of Chinese OEMs. Originally Lifan had planned to establish a wholly-owned plant, but the location of the plant was unclear and changed, and ultimately it was determined that the new plant was to be built in Lipetsk province. Production will start at the end of 2017 or in early 2018. Furthermore, the company expanded its business to car sharing services. The company announced that they would partner with Lifcar, a Russian car sharing company, on the car sharing of the Lifan X50 SUV in Moscow. The companies plan to put 200 units into operation initially, and later add another 1,000 units.

Meanwhile, although their Uruguay plant was built in 2010, it suspended operations of the plant from 2016 as a result of weak sales in the Brazilian market. However, as demand increased in the regional markets, the plant has resumed operations beginning in April, 2017.



Overseas production facilities for Lifan motors

Country Area/City Establishment
(y)
Production capacity
(unit)
Overview
Russia Cherkessk Oblast 2007 30,000  Derways started KD production in the Cherkessk province of Russia in 2007.
Lipetsk Oblast 2010 60,000  The wholly-owned new plant was inaugurated in 2015. The plant has an investment amount of USD 300 million, and is located in the special economic zone in the Lipetsk province. The site area of the plant is 600,000 square meters with lines for vehicle body, painting, and assembly. Plant capacity is 60,000 units per year, with plans to eventually increase capacity to 200,000 units per year. Production will start at the end of 2017 or in early 2018. As of the end of 2014, the company had planned to build the plant in the Kaluga province.
 Consignment production at the Derways' plant will continue after the new wholly-owned plant begins operations.
Azerbaijan Nakhchivan Autonomous Republic 2008 20,000  Mass production started in 2001. The plant assembles four models including the Lifan 520 and Lifan 620.
Iran Bam 2007 30,000  Produced by Kerman Motor Company. Plant capacity is 30,000 units per year (1 shift).
Iraq Mahmudiyah 2011 20,000  The production line of ZAMZAM SPRING, a state-owned automobile company in Iraq, started operations from March 2014.
Uruguay San Jose 2010 30,000  Although the plant of the joint venture partner Effa was established in San Jose in 2010, it suspended operations since 2016 because of weak sales in the Brazilian market.
 The plant resumed operations in April, 2017. The production volume planned for 2017 is 1,000-1,500 units.
Ethiopia Suburban Addis Ababa 2010 5,000  A sales company was established in 2009 and KD production began in 2010. A new plant was built in 2014.
 The new plant was built in the Eastern Industry Zone, a zone which was developed at the initiative of the Chinese government. The registered capital is USD 5 million. The plant conducts sales and aftersales service in addition to KD production.
Myanmar Yangon 2001 10,000  Production by KaiKaiSangDa Auto. Total investment is CNY 20 million. The site area is 40,000 square meters. Capacity is 10,000 units.

(Source: Created by MarkLines based on Lifan group press releases and various media reports about the company)



Overseas sales volume for major country

(unit)

2011 2012 2013 2014 2015 2016
Iran 2,005 2,996 9,410 32,596 24,692 26,938
Russia 17,910 20,544 27,467 23,619 15,131 17,460
Brazil 2,822 1,219 2,136 5,287 5,000 3,408
Uruguay 519 302 778 829 1,168 1,115
Kazakhstan 0 0 0 0 0 604
Chile 1,347 1,674 1,814 1,618 718 411
Argentine 0 0 0 0 3 399
Myanmar 0 0 0 0 203 242
Hellenic 0 8 0 0 0 0
Colombia 110 44 0 0 0 0
Viet Nam 7 0 0 0 0 0

(Source: Created based on MarkLines' data.)

 



Lifan Motors sales numbers in China (factory shipments)

(unit)

OEM's Type Model 2014 2015 2016 Jan.-Oct.
2016
Jan.-Oct.
2017
Chongqing Lifan Passenger Vehicle MPV Lotto 0 0 9,002 0 1,098
Xuanlang - - - 0 25,774
SUV Lifan X50 0 19,955 15,938 11,537 3,998
Lifan X60 (LF6430) 50,010 28,226 15,611 9,272 9,342
Lifan X80 - - - 0 1,196
Myway 0 0 48,407 0 25,025
Sedan・Hatchback Lifan 320 6,973 7,320 432 341 679
Lifan 520 661 10 15 15 2
Lifan 530 5,457 521 1,162 1,060 473
Lifan 620 16,618 4,181 5,404 3,622 3,523
Lifan 720 8,573 3,708 157 108 27
Lifan 820 0 9,216 2,151 1,721 3,997
Mini Van Unclassified 0 0 0 16,789 0
Lifan Foison 59,555 58,811 2,512 26,065 2,453
Total 147,847 131,948 100,791 70,530 77,587
Chongqing Lifan Automobile

Light trucks

59,110 103,347 74,891 52,041 61,549

Medium trucks

26,529 40,819 69,664 40,915 61,186

Mini trucks

0 0 26,947 25,392 22,511
Total 85,639 144,166 171,502 118,348 145,246
Grand total 233,486 276,114 272,293 188,878 222,833

*Note: 2016 sales volumes for some of the models in the table above may not be consistent with the actual sales volumes in the January - October, 2016 timeframe as a result of volume adjustments made to the data.

(Source: Created based on MarkLines' database)

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Keywords
Lifan, NEV, EV, PHV, Baidu, Apollo

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