Colorful history, ambitious goals for Chang'an Auto

State-owned giant grew from arms maker founded in 1862

Despite the slowing domestic market and increasing competition, the nation's fourth-biggest automaker Chang'an Automobile Group plans to more than triple its annual production and sales to 6 million vehicles by 2020.

Over 60 percent of the planned 2020 total will be vehicles from its wholly owned brands, the company said.

With a current production capacity of nearly 2 million units, the automaker sold about 1.56 million vehicles in the first 10 months of the year.

Chang'an now makes a range of models carrying its own marques including minivans, cars, SUVs and pickups, mostly targeting the low-priced, entry-level market.

The company also has joint ventures with foreign carmakers Ford, Mazda, Suzuki and PSA Peugeot Citroen.

Its ambitious 2020 targets were announced at the company's 150th anniversary ceremony held in its home base Chongqing on Nov 24.

The State-owned auto giant had its origins as the Shanghai Foreign Gun Bureau, one of China's earliest weapon manufacturers, which was established in 1862.

When the Japanese invaded Shanghai in 1937, the company moved its factory all the way inland to the city of Chongqing, where it has since stayed. In the late 1970s, it shed most of its military business and changed to civilian production.

Although it has a long history, Chang'an only began making automobiles in the 1980s.

It forged an agreement with Suzuki for expertise in small cars and started to make minivans in 1984. The companies formed a joint venture in 1993.

The Benben

For many years after, Chang'an was well-known for its minivans. It took until 2006 for its first wholly owned sedan, the Benben, to roll off the production line.

Xu Liuping, president of Chang'an, said that in the automobile business, Chang'an "is only a juvenile" that he hopes will grow to maturity in the coming decade.

"Chang'an will unveil two to three new models from its own brands every year," Xu said.

He also disclosed that Chang'an will roll out a medium-sized SUV next year to add to its portfolio of mainly entry-level vehicles.

In March Chang'an launched its first mid-sized sedan, the EADO, the latest milestone in its effort to improve its brand image and tap the higher-priced market. It introduced its first SUV, the CS35, in October.

Xu added that Chang'an will continue developing its own energy-saving and new-energy vehicles, with a target of 1 million units in annual production and sales in 2020.

He said that the company plans to build three platforms for hybrid vehicles, two platforms for pure-electric vehicles and one for its plug-in hybrid vehicles over the next eight years.

"Chang'an is committed to becoming a world-class automaker," Xu said.

As part of its effort toward the goal, Chang'an has established R&D centers in Italy, Japan, the UK and the US to enhance product design and technological research.

Boosting JVs

In addition to ambitions in improving its own-brand products, Chang'an also pledged to boost businesses at its joint ventures.

Xu said that by 2020, the joint venture between Chang'an and Ford will have an annual capacity of about 1.5 million vehicles, while the combined annual production at its ventures with Mazda, Suzuki and PSA Peugeot Citroen will also reach about 1.5 million.

Chang'an PSA is the company's most recent joint venture. The Sino-French partnership was established in November last year, to produce the high-end Citroen DS cars in the southern city of Shenzhen starting in 2013.

Responding to the government call for consolidation in the industry, in 2009 Chang'an took over minivan makers Changhe and Hafei as well as engine producer Dong'an - all three subsidiaries of Aviation Industry Corp of China - marking the biggest-ever asset deal between State-owned auto companies.

After explosive expansion in 2009 and 2010, China's auto market slowed to single-digit growth last year and this year.

In an earlier interview, Xu from Chang'an said that China's automotive market will have stable growth for another 20 years, reaching a market size of 30 million or even 40 million vehicles.

Contact the writers at xuxiao@chinadaily.com.cn and hantianyang@chinadaily.com.cn