Archive for China

Geely Automobile Holdings Ltd is once again rethinking it’s RM100 million investment plans in Malaysia. It was not very happy with the new National Automotive Policy which stated that any new foreign car manufacturers who want to enter the Malaysian market would have to export 80% of it’s production here in Malaysia. It used to be 30:70.

It was also not very happy with the government ruling that no new manufacturing licenses will be granted until overcapacity problems are addressed. I’ll leave you to think of your own definition of what overcapacity. And there’s always that case-by-case basis clause.

If Geely does not invest in an assembly plant, Geely’s local partner IGC Corp will still continue assembling the right-hand drive Geely cars at Oriental Assembly in Johor.

If I was Cam Soh, I would be pretty frustrated by now. First his Chery A160 vehicles encounter AP problems, now there’s a problem with his venture into assembling Geely vehicles.

It makes me wonder, does the government really intend to develop Malaysia into a regional automotive hub is it just hot air when the policies it formulates do not look very encouraging. But then again, the ‘case by case’ clause is a very good wildcard.

Related:
Geely CK1 Freedom Cruiser
Geely Freedom Cruiser assembled in Malaysia

More developments on Malaysia-China automotive industry relations. Previously there were rumours on Proton’s involvement with Jinhua Youngman and Chery. Jinhua Youngman was believed to have entered a deal with Proton to assemble Proton CKD kits in China and rebadge them as Jinhua cars.

Now there is news on talks between Proton and Chery Automotive Co Ltd for a two-way partnership which would allow Proton cars to be assembled for the growing Chinese market, as well as providing Chery a base for automotive assembly here in Malaysia. While Proton and Chery officials did not comment much on talks, word is that talks have advanced to a relatively advanced stage although no final agreement has been reached yet.

The outcome of this would likely be Proton CKD kits assembled at Chery facilities for the Chinese market, and Chery CKD kits assembled at Proton’s facilities for the Malaysian market. But I wonder what of the NAP ruling regarding selling assembling capacity to 3rd party manufacturers.

Zhejiang Geely Automotive Company will go ahead with the assembly of it’s Geely CK1, or Geely Freedom Cruiser here in Malaysia. It will be assembled by Information Gateway Corporation Sdn Bhd. Production is expected to be 10,000 units a year by August 2007, with 20% of that amount destined for the local market and the rest for export. That would mean 2,000 Chinese cars a year on our roads. Have any of you seen a Chinese car on the road yet? I’ve only seen the Chery A160 at an exhibition in Mid Valley. Can’t see them anywhere. However Datuk Cam Soh says 100 out of 262 CBU Chery A160 models have been sold.

Click here to read the rest of Geely CK1 Freedom Cruiser

Proton is expected to announce a non-exclusive alliance with a Chinese firm this week. At one point, Proton’s board had thought about an exclusive partnership with one firm, but Datuk Azlan Hashim told reports that Proton’s board had re-thought the situation and consluded it was better to have several strategic partners in multiple areas like products, components, market access and other activities. Are we looking at a “don’t put all your eggs in one basket” philosophy being put into effect here? The partnership is expected to be finalised in April.

Previously there were rumours on tie-ups between Proton and Chery, as well as Proton and Jinhua Young Man related to car assembly in China. There were not much follow-up on the Chery rumour, however StarBiz reports today that Proton would be selling CKD kits of cars like the Proton GEN-2 to Jinhua QingNian. I think it’s safe to assume Jinhua QingNian is Jinhua Young Man as they are both from ZheJiang.

It is hoped that this partnership will boost Proton’s economies of scale. Jinhua QingNian currently builds luxury coaches and trucks, and hopes to enter the passanger car market with Proton’s CKD kits. The cars will be marketed under Jinhua’s own brand and logo in China. If all goes well and the CKD kits have good sales in the China market, it will definitely improve Proton’s profitability as economies of scale improves and cost per part goes down. Good move, Proton.

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Zhejiang Geely Automotive Company is China’s biggest privately-owned automaker and specialises in making budget cars for first-time buyers like it’s 1.3 liter Geely Merrie which looks like a mutated Mercedes Benz and the 1.6 liter Geely Freedom Cruiser. Other models produced by Geely includes funky names like Uliou, Maple, Urban Nanny and Beauty Leopard.

Most of Geely’s models are based on a 1987 Daihatsu Charade. Their engineers truly know how to milk the most out of a platform, with small cars, medium sized cars and even vans (Urban Nanny) being based on the 1987 Daihatsu Charade platform. For those who do not remember platform model years, the 1987 model is the G100.

Geely will be the first automaker from China to assemble cars outside of China at it’s plant here in Kuantan. The Geely plant in Kuantan is owned by Information Gateway Corporation Sdn Bhd. The plans had been delayed so far because of the NAP, and pending approval from our government. The government has given the go ahead, so production is expected to start soon.

Geely will be assembling the Geely Freedom Cruiser here in Malaysia in 1.3 and 1.6 engine options. Geely may make 2 other larger models in the 1.8 liter engine range later. The Freedom Cruiser is said to be based on a Daewoo design, with engines design licensed from Toyota.

These cars are meant for the export market, with almost all of them destined to be shipped out around the region. The target sales for the Malaysian market is so low that it’s almost negligible.

Geely rove Malaysia rong time!

Source: Wikipedia Geely 7151CK Freedom Cruiser, Shanghai Daily

Related: IGC to start Geely assembly in October 2006

Visionary Vehicles has brought in Chery’s first sedan for the US market – the Chery A520. The Chery A520 is part of the Chery A5 series, with the number 20 indicating a 2.0 liter engine. It is said that it’s based on an extended Volkswagen Golf Mk3 platform, something like an older Seat Toledo.

Click here to read the rest of Chery A520

Many of you remember the Citroen C4 because of it’s funky advertisement showing a Transformers style Citroen C4 robot grooving away to a song. The Citroen C4 is available in hatchback and coupe form, but Citroen has developed a new notchback model for the China market as the Chinese prefer notchbacks rather than hatchbacks or coupes. Shows how important the China market is.

Click here to read the rest of Citroen C-Triomphe based on Citroen C4

A few days ago there were rumours on Proton partnering up with Jinhua Young Man Automobile for it’s maiden entry into the Chinese market.

Yesterday, industry sources were quoted to say Proton would be tieing up with Chery Automotive Co Ltd to produce cars in China. Sources report that Proton Managing Director Syed Zainal Abidin was in China last month and visited Chery’s factory. The source also said the Gen2, Wira and Savvy will be the first cars which Proton would assemble in China for the Chinese market.

Production will begin with a capacity of 50,000 cars a year and it could be increased to 200,000 a year in 3-4 years depending on response and whether Proton has enough models in it’s line-up.

Chery Automobile recently launched it’s first car the Chery A520 in the United States through Visionary Vehicles and is surrounded by a controversial shroud for it’s Chery QQ minicar, which is a completely 100% rip-off of the Chevy Spark, just one of the many acts of vehicle piracy in China.

All rumours from anonymous industry sources so far. Nothing official from Proton.

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The Lifan Group, a Chinese motorcycle manufacturer has recently ventured into the car business, with their US$9,700 Lifan 520 sedan. A recent move has shown this is not just a one-off shot at making a quick buck, they are in it for the long haul. Yup, Lifan has actually purchased the Campo Largo engine plant in Brazil from DaimlerChrysler and BMW AG, who jointly own the factory.

Click here to read the rest of Lifan buys Tritec factory

I posted on China’s various imitations of western and Japanese cars a long long time ago. One of the most blatant copies have been the Chevrolet Spark/Daewoo Matiz’s copy. Meet Shanghai Automotive Industry Corp’s Chevy QQ. It’s pretty hilarious really how they managed to transform Chevrolet’s pet name Chevy into Chery. The Chevrolet Spark is on sale here in Malaysia with an 800cc engine if I am not mistaken.

But do the imitations perform the same as the originals? Do Petaling Street Rolex watches last as long as the original? It depends on your luck really, but thankfully in the automotive world we have something called crasjh tests so we can at least measure a car’s safety performance.

Click here to read the rest of Chery QQ Crash Test

In order to enter the coveted Chinese market, it is part of the rules and regulations that you have to partner up with a Chinese company to set up shop there. Proton has had intentions of entering the Chinese market for quite some time and now it is rumoured that they’ve identified a suitable partner for them to enter the Chinese market with.

The prospective partner is Jinhua Young Man Automobile, based in Zhejiang. Rumours are that Jinhua is setting up to build a sedan model with Proton at it’s factory in Shandong. Jinhua also assembled 800cc minis in Iran with Iran Khodro.

The first sedan is expected to roll out of production in June 2006. It’s not known whether it will be a Proton or Jinhua-badged model, or whether it will look like any of the Protons we have here in Malaysia.

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Six months after Nanjing Automobile bought MG Rover, Rover’s future is looking bleak as Nanjing doesn’t seem to be doing anything about restarting Rover’s production.

Nanjing rescued Rover from bankruptcy from USD2.44 billion worth of debts in July 2005 and stated it aimed to produce at least 80,000 sedans and sports cars a year within five years in Britain with 2000 British workers, on top of production in China.

But what’s happening now doesn’t really reflect that plan. The UK factory is being packed up slowly and send to China by boat.

Source: Reuters

The NAZA Group, controlled by tycoon Tan Sri SM Nasimuddin SM Amin has set up a company called N-2 Sdn Bhd. N-2 is believed to focus on assembling and distributing Chinese-made mini cars, competing with Perodua in the K-car market, like the Kancil and Kelisa.

A Chinese auto company will be involved in a joint-venture to set up an assembly plant in northern Malaysia. Little is known of which Chinese auto company this is, but from past rumours it might be the Hafei Lobo. Just a little speculation on my part though.

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UPDATE: The CM8 has been launched in Malaysia as the Chana Era CM8, the cheapest 7-seater in Malaysia with a price tag starting from under RM40k.

ChangAn Auto Group, based in Chongqing, China has completed negotiations with a Malaysian company to build it’s ChangAn CM8 here in Malaysia. An agreement was signed this week on investing and building an assembly plant for the vehicle. ChangAn Auto is the fourth-largest producer of automobiles in China as of 2005.

Click here to read the rest of ChangAn CM8 assembled in Malaysia

The European Commission is threathening legal action against China for discrimination against European car companies, with their latest decision to revise tax tariffs for car parts which indirectly forces companies to source components from Chinese producers.

China has reclassified car parts as ‘fully finished cars’, something like CBU, which carries a 34% tax, double from the previous rate. Because parts are expensive to bring in now, in order to be economically competitive manufacturers have to source parts from Chinese producers to avoid the high tax.

The problem is foreign car manufacturers are not allowed to setup their own businesses in China. They must partner up with an existing Chinese company, forced to accept minority shareholding. Allowing a Chinese company access to all your designs would only result in one thing, vehicle piracy!

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China Pirates