Business

SAIC venture to produce new brand of passenger cars

By LI FANGFANG CHINA DAILY
Updated: 2010-07-08 00:00

BEIJING -- China’s biggest minivan producer SAIC-GM-Wuling Automobile Co Ltd will unveil its passenger car strategy with a new brand on July 18 in Shanghai, Liang Xiaodong, a company official, confirmed on Wednesday.

“We will launch a self-developed brand in the medium-sized sedan segment to improve our competitiveness in the upper level segment,” said Yang Jie, general manager of sales under the three-way tie-up between GM, SAIC Motor Corp and government-owned Wuling Motors.

“Starting in the passenger car business will make this year a milestone for SAIC-GM-Wuling, while we still work to maintain our dominant leadership in China’s light commercial vehicle market.”

The new car, based on the prototype of GM’s Excelle model, is under development in the Pan-Asia Technical Automotive Center, a joint venture between GM and SAIC.

The company is aiming to launch at least one new model every year under the new brand.

“With our years of experience in operating GM’s Chevrolet Spark car in research and development, parts sourcing, manufacturing, sales and services, we are confident about our own passenger car brands,” said Yuan Zhijun, the company’s vice-general manager.

SAIC-GM-Wuling has started to establish a distribution network for the new brand based on its original Chevrolet Spark dealerships, which are separate from their light commercial vehicle network.

Yang said he expects the total sales of SAIC-GM-Wuling of this year to hit 1.23 million units.

To prepare for the production of new branded medium-sized sedans, Wuling plans to expand its annual capacity in its Liuzhou plant from 590,000 units to 800,000 units by the end of 2012.

It will also add 210,000 units of output to its Qingdao plant this year.

Yang said that Wuling will replicate its “low-cost, high value” business strategy into the new passenger car brand.

The company has kept the top position in China’s minivan sector for four years, based on its successfully low-cost business model.

It made an industry record by selling one Wuling minivan per five seconds, on average, in 2009.

Analysts said that as the self-owned brand of a joint venture, the Wuling mid-size car will be competitive in the segment as it benefits from both the quality of a joint-venture brand and the price of a self-owned brand.

The company sold 1.06 million vehicles last year, more than half of GM’s total sales of 1.83 million, being the major force behind the ailing GM in 2009.