BAIC to expand overseas with new manufacturing plants

By Qiu Quanlin (China Daily)
Updated: 2011-06-23 13:59
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GUANGZHOU - Beijing Automotive Group (BAIC), the Chinese partner of Daimler AG and Hyundai Motor Co, will increase its car sales in the Southeast Asian market in coming years, when a new factory begins operations in South China, said a top company manager.

The Beijing-based automaker started construction of the manufacturing base in Zengcheng, a suburb of Guangzhou, the capital city of Guangdong province, on Wednesday.

"The base will be of great importance in the company's strategy to increase sales in the overseas market, especially in Southeast Asia," Xu Heyi, chairman of BAIC, told China Daily.

BAIC purchased Baolong Light Motor Vehicle Production Co Ltd, which is based in Zengcheng, in August. The acquisition helped BAIC to begin manufacturing in the southern town.

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The company expects to finish the first phase of the manufacturing base, which has an investment of up to 3.6 billion yuan ($557 million), by the end of next year.

The plant will mainly produce its own-brand vehicles, including SUVs, multi-purpose vehicles and other energy-saving sedans, and will eventually have an annual production capacity of 100,000 vehicles.

That will help generate annual revenue of more than 10 million yuan, according to company sources.

The Zengcheng plant has become part of BAIC's blueprint to create its own-brand vehicles. In addition to the southern plant, the company has started building manufacturing bases in Beijing, Chongqing in the southwestern China and Hunan province in Central China.

In April, construction started at BAIC's northern manufacturing base in the Beijing Airport Economic Development Zone.

Last year, BAIC inaugurated a new plant in Zhuzhou, Hunan province and rolled out its first own-brand automobile - the BC 301Z. Moreover, it's planning to buy a minivan plant with its joint venture partner, the motorcycle maker Chongqing Yinxiang Group.

"Up to two-thirds of cars manufactured in the southern plant will be sold in the Southeast Asian marketplace," Xu said.

The remaining vehicles will join the market competition in the southern region, which has already developed some popular imported brands such as Honda, Toyota and Nissan.

"In our long-term strategy, we give priority to exporting our cars to the international market. But I believe that our self-innovated products will also make up the domestic market shortfall," Xu said.

Xu Zhibiao, the Party secretary of Zengcheng, a county-level city, said BAIC's plant will help promote the overall development and upgrade the competitiveness of the auto industry in Guangzhou.

In addition to BAIC's plant, Zengcheng also has another leading joint-venture plant - the Guangzhou Honda manufacturing base.

"It will help develop high-end industries in the city," Xu said.

Also on Wednesday, the Zengcheng city government signed a series of cooperative agreements with some leading domestic companies such as Alibaba Group to build a strategic industrial cluster, which will focus on new-energy and the modern service industries.

Zhang Xiaoyu, executive vice-president of the China Machinery Marketplace Federation, said BAIC's manufacturing bases will help boost the country's ability to create own-brand vehicles.

"Own-brand vehicles should focus on new-energy resources. Only through creating own-brand cars can the country become a leading automaker in the international market," Zhang said.