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The Chinese government’s stimulus package has helped to boost demand for cars in China’s domestic automobile market. Sales are up by a quarter from last year while demand has plummeted in all other major car markets. With car sales in the U.S. down by roughly 41% from a year earlier, China is passing the United States as the world’s largest auto market.

In order to form a homegrown automotive giant, the Chinese governments is restructuring the country’s auto industry. By cutting the number of domestic car makers and merging them to a few dominant players, two or three of them should evolve into global car makers taking on GM, VW, Tata…

SAIC - the Shanghai Automotive Industry Corporation - is already the nation’s largest car maker and is expanding to overseas markets. The company has already some experience due to joint ventures with Western car makers. Shanghai GM for example is a joint venture between General Motors and SAIC which is a leading manufacturer of passenger vehicles in mainland China. In addition, SAIC also partnered with Volkswagen Group (VW) - Europe’s largest car maker - to form Shanghai Volkswagen Automotive. SAIC-GM-Wuling Automobile is another joint venture with General Motors, selling trucks and vans in the rural regions of China.

Transitioning from a local partner for Western automobile manufacturers to a dominant, international car maker, SAIC is bringing own-brand cars to the market and investing in R&D of hybrid cars. By the end of 2011, SAIC will bring large numbers of affordable hybrids to the Chinese market. Although they focus on the Chinese market, SAIC also has plans to expand globally. In 2010, SAIC cars will be introduced to the Israeli market.

The company’s annual output is about 2 million units. According to SAIC’s website (www.saicmotor.com), it has a workforce of 34,000 people.

This is a commercial for the new SAIC Roewe 550, a four-door sedan with a platform developed solely by SAIC which launched last year and is available in China and Chile. The purchase price is roughly US$ 18,000 according to this website.

Another Chinese automaker - BYD - recently got a lot of attention when it introduced the F6DM - a plug-in electric car - at the North American International Auto Show in Detroit earlier this year. BYD is a leading producer of rechargeable batteries. This is a perfect example that companies whose business has never been linked to auto making are now starting to enter the auto market. BYD’s slogan is “Build Your Dreams” and since Warren Buffett - the world’s richest man and a celebrity investor - has already acquired a 10% stake of the company, it’s extremely likely that BYD will get a lot of attention in the future. A BYD executive said “In the next five to 10 years we will see big changes. Electrification will happen much sooner than people expect“. The company benefits from its expertise in battery manufacturing - a important advantage since the battery pack is the most important and most sophisticated part of an EV - and is unimpressed by high costs as they have a gigantic market in China and all around the world. The BYD F3DM has an all-electric driving range of 63 miles (100 kilometers - similar to the Chevy Volt) and if necessary, a small gas engine kicks in and extends the range to 360 miles (580 kilometers). The Shenzhen-based company is in negotiations with major Chinese utilities about a plan of building a network of fast-charging stations. (from Auto Industry in Transition II)

China wants to restructure auto industry

SAIC To Launch Hybrid Cars To Market By Late 2011

This entry was posted on Sunday, March 22nd, 2009 at 8:18 AM and is filed under Electric Cars & Auto Industry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.