Special Supplement: Homegrown automaker gears up for brilliant development

Huachen Automotive Group, the parent company of Hong Kong-listed Brilliance China Auto, plans to ride on its momentum in 2007 and add greater luster to its brilliant development history by contributing to the development of China's independently developed auto brands and the revitalization of the old industrial base of Liaoning Province.

In the first half of 2007, Huachen's vehicle sales increased 58.3 percent year-on-year, while vehicle exports rocketed by 125 percent, with tax paid increasing 72.7 percent.

Its stellar first-half performance proves Huachen is gaining a strong growth momentum, which will greatly encourage the nation's independently developed auto brand to reach its ambitious goals.

Huachen is targeting an annual sales figure of 300,000 vehicles this year, a 43-percent increase over the 210,100 units sold in 2006. The group also aims to boost sales income to 45 billion yuan, an increase of 41 percent over last year.

Based in Shenyang in Northeast China's Liaoning Province, the group has brilliant achievements to its credit in the first half of 2007.

Brilliant achievements

On March 18, Huachen delivered the "Zhonghua 1.8T Sedan", representing the country's most advanced independently developed automobile, to the Great Hall of the People in Beijing, and also announced the "Huachen Auto self-development declaration" in this venue for the National People's Congress.

On March 27, Huachen reached a deal with Russia to sell 80,000 Jinbei light-duty trucks, one of the biggest overseas deals inked by a Chinese automaker. The export of the trucks, worth $1.3 billion, was one of the most significant moments in the country's light-duty truck export history.

On April 8, the first phase of the group's A-level auto making base construction project started in Shenyang, with which Huachen successfully extended its auto manufacturing line to a broader and wider range. The A-level base will manufacture 100,000 and 150,000 vehicles annually in the first and second phases respectively.

Huachen ranks among the top 10 in terms of customer satisfaction in the country's automobile industry. The company got a high score of 815 in the J.D Power Asia-Pacific 2007 China Customer Satisfaction Index (CSI) Study released on July 30. This makes the firm the country's only homegrown automaker to rank above the world average level in customer satisfaction. The CSI study bases its evaluation on consumers' response regarding vehicle quality and dealer service.

In August, Huachen successfully entered the top-ten club in terms of July vehicle sales, with 7,500 units of Zhonghua Junjie being sold, according to figures released by the China Association of Automobile Manufacturers. The company has been competing successfully with foreign auto brands, with sales of the Zhonghua surpassing 10,000 units for eight consecutive months.

Improving management

From 2005 to date, Huachen Automotive has taken a series of measures to overcome development obstacles, reform its internal management and improve corporate governance in a bid to revitalize the old automobile manufacturing base in Liaoning Province and develop the country's autonomous brands.

During this period, the Liaoning provincial and Shenyang city governments' support for the development of the homegrown auto brand and their high hopes for Huachen cars have played a positive role in the healthy development of Huachen Automotive.

The strong support from the governments and the dedication of the Huachen Automotive team has helped Huachen steer itself on to a healthy development track in 2006, by modifying its external image and strengthening its internal management.

Huachen has launched a special program focusing on "independent innovation, independent technology and independent brand" to guide its self-development. The implementation of the program has improved the product quality management system, creating favorable conditions for the rapid development of the enterprise.

The group's market-oriented development has enhanced its capacity for market response. Huachen's business development strategy has been made even more effective by its integration of the world's resources for independent innovation.

Within two years, Huachen Automotive has gained a strong momentum and its influence on the Chinese automotive market is becoming increasingly stronger.

The year 2006 was a remarkable year for Huachen, when the firm's major economic indicators witnessed phenomenal improvement. Its status in the domestic automobile industry was lifted considerably, as it ranked sixth among its peers in terms of sales income.

It was in 2006 that Huachen's Zhonghua Junjie entered the market and its 1.8T engine reached a stage of mass production, which were major breakthroughs for core technologies in the nation's auto industry.

Huachen's export of Zhonghua cars to Germany made China's dream of exporting vehicles to the international high-end market a reality.

Marketing system

With Huachen's excellent development momentum and the governments' whole-hearted support to homegrown vehicle brands, Huachen is upbeat about writing a new brilliant history.

It will intensify its research and development efforts to boost sales in both the domestic and overseas markets.

"Instead of only serving the domestic market, Huachen will enhance its efforts to explore the overseas market with innovative technology and upgraded service, to boost our homegrown auto brands. We hope Zhonghua and Jinbei will become world famous auto brands," said Qi Yumin, Huachen chairman.

The company displayed the Zhonghua Zunchi and Junjie sedans at the Geneva motor show in March this year - becoming the first Chinese homegrown automaker to take part in the event.

At present, Huachen has exported its automobiles to the European Union, the United States, Canada and Russia.

Huachen Automotive is very clear about its path toward continued development, determined to fully implement the "three Strengths, two Creations and one Superiority" plan. The "three Strengths" refers to strengthening the marketing and manufacturing systems, as well as creating international operations. The "two Creations" refers to creating independent research and development models, and developing a first-class team. The "one Superiority" refers to optimizing resource utilization.

The group aims to boost its vehicle sales to 600,000 in 2010 with sales revenue of 100 billion yuan and transform itself into an international auto group.

(Shanghai Start 09/07/2007 page2)