BYD to manufacture 1,000 electric buses a year in the U.S.
May-30-2013 By : agxadmin
BYD, the first Chinese-owned vehicle manufacturer producing in the United States, has unveiled ambitious plans to eventually build as many as 1,000 plug-in electric buses a year at a refurbished RV manufacturing plant in the Mojave Desert city of Lancaster in LA County, California. BYD purchased a former Rexhall Industries RV factory for its electric-bus manufacturing operations. Rexhall CEO William Rex will stay on as General Manager of the newly formed BYD Coach and Bus. A number of Rexhall employees will be maintained as the plant shifts to new ownership. Senior Vice President Stella Li said the first of 10 zero-pollution vehicles, already on order from the city of Long Beach, should roll off the assembly line next year. Within two years, Li said, BYD Motors expects to be producing 50 buses a year, and it will continue to ramp up production, hoping to reach the plant’s capacity of 1,000 buses a year within a decade or two. All the buses will be powered by the company’s own iron-phosphate batteries, which will be made at another plant near the bus factory in Lancaster, 100 kilometers east of Los Angeles. BYD is the world’s largest maker of rechargeable batteries. It was the first time a Chinese vehicle company is to open a vehicle manufacturing plant in the United States. BYD has invested more than USD10 million in the two plants. When the vehicle plant reaches full production, it could employ as many as 1,000 people. BYD’s North American headquarters in Los Angeles now employs about 40 people but will also grow with the bus production, Li said. Building vehicles in the U.S. enables BYD’s customers to take advantage of the federal government’s “Buy America” subsidies to support domestic production, the China Daily reports.
GM to expand production by 20% in China this year
By : agxadmin
Despite record sales of vehicles in China, General Motors has posted a 14% drop in first-quarter profits, faced with one-off costs and weaker earnings in its core North American market. Detroit-based GM had 15.2% of the Chinese market during the January-March quarter, and expects to invest at least USD11 billion in China between 2013 and 2016, adding four assembly plants and raising capacity by 30% to 5 million vehicles. It will boost capacity in the country 20% this year from a year ago. Margins at GM’s Chinese joint ventures were 11.7%, up from 10.2% in last year’s first quarter, compared to margins of about 4% in the U.S. GM has 12 joint ventures and two wholly-owned enterprises in China. As sales of luxury sedan and sport-utility vehicles (SUVs) in wealthy Chinese coastal cities slow, foreign automakers are turning their attention to western China. GM and its Chinese joint venture partners plan to open a USD1 billion factory in Chongqing in 2015 that will produce 400,000 cars a year. GM sold a record 816,373 vehicles in China in the last quarter, a 10% jump from a year ago. As part of its effort to win over Chinese luxury-vehicle buyers who favor German brands BMW, Audi and Mercedes- Benz, the U.S. company in February put its XTS Cadillac sedan on sale in China. GM China President Bob Ferguson has said he expects Cadillac sales in China to triple to 100,000 by 2015. Profits in GM’s international operations, including China, fell 5% to USD495 million, and gains in China helped offset weakness in other regions, including India, GM said.
Chinese authorities have approved a USD1.3 billion General Motors plant to make luxury Cadillac cars. Construction of the plant, which will have an annual capacity of 150,000 vehicles, will start in June in Shanghai. It will be run by Shanghai GM, the joint venture of GM with China’s SAIC Motor. The company plans to unveil one new Cadillac model a year through 2016 to boost annual sales of the marque from 30,000 vehicles last year to 100,000 by 2015.
Sales growth in the luxury vehicles’ sector slows
By : agxadmin
The central government’s clampdown on official waste and extravagance has put the brakes on China’s luxury vehicle market in the first quarter of the year. Sales growth for the luxury vehicle sector, dominated by German brands Audi, BMW and Mercedes-Benz, slowed to 4%, far below the 13% annual growth in the passenger car market, according to the China Association of Automobile Manufacturers (CAAM). China’s luxury vehicle sector has grown at an annual average of 36% in the past 10 years, according to a report by consulting firm McKinsey & Co. Analysts attributed the decline to new guidelines to improve officials’ working style, and strict policies to curb the use of public funds. The question is how strict the rules will be enforced. “The issue may hopefully set off a public trend for less-expensive vehicles in the short term,” said Cui Dongshu, Deputy Secretary General of the China Passenger Car Association (CPCA). McKinsey & Co said in its report that China is expected to overtake the United States as the world’s largest premium car market by 2016, selling more than 2.3 million units that year and hitting 3 million by 2020. McKinsey found that the average annual disposable income of 1,200 Chinese luxury car owners interviewed was CNY450,000, but those with annual incomes of CNY100,000 to CNY200,000, the minimum income range regarded as able to afford basic luxury cars, is growing rapidly in China. Potential also comes from the quickly developing lower-tier cities in China. According to Morgan Stanley & Co, premium car dealerships still have no presence in 111 large Chinese cities. As the government directly accounts for no more than 2% of the car market, and SOEs contributed about 5%, “favorable consumer sentiment towards luxury vehicles outside of government and SOEs purchasing will likely continue to drive this segment of the market forward,” said Thomson. “At the same time, most commentators believe that it will still take at least five to 10 years for a domestic Chinese manufacturer to develop a genuinely competitive substitute offering at the luxury end of the market,” the China Daily reports.
Carat Security Group to build first plant in China
By : agxadmin
Carat Security Group, the Belgian company which specializes in providing armored limousines worldwide, plans to open its first manufacturing facility in China. Carat Security, which produces vehicles under the Carat Duchatelet and Centigon brands, has a 40-year history in the business. It has supplied vehicles to royal families in the Middle East, to African leaders, and to top Western government officials, said Benoit Ceulemans, its Vice President. He said China is becoming its most promising market. “Different from the Middle East and Africa, we are looking for individuals, private businessmen and company owners,” said Ceulemans. He added that although the after-tax price of its cars sold in the Chinese market can be as much as CNY8 million, sales are brisk. As well as Lexus cars, the company specializes in producing tailor-made Mercedes Benz S-Classes, Bentleys, and Range Rover vehicles. Every year the company refits about 70 luxury cars, with work including extending their length, and adding armor. The alterations can double the cost of the original. The company’s goal is to sell about half of its production to China in 2014. Carat had sales of about €100 million last year, and employs 800 people worldwide in seven vehicle manufacturing facilities, including in Belgium and Brazil, and is now considering one in China. According to the U.S. research company McKinsey & Co, demand for luxury automobiles in China is expected to reach 3 million cars by 2020, up from the 1.25 million sold in 2012. Ceulemans said the company attended the Shanghai International Automobile Industry Exhibition two years ago, where it sold the two cars it had brought to the exhibit. Carat has a partnership with a local importer, Dalian Carat International Trade Co, the China Daily reports.
China’s automakers focus on SUVs
By : agxadmin
This is China’s Year of the SUV. Whatever their specialties used to be, automakers ranging from global brands to China’s ambitious rookies are scrambling to cash in on the explosive popularity of sport utility vehicles (SUVs). The SUV boom clashes with Beijing’s efforts to push automakers to develop electric cars and to sell smaller vehicles to help curb air pollution and demand for imported oil. But the SUV’s image of safety appeals to prosperous Chinese drivers who face chaotic city streets, while electrics from BYD and other producers struggle to attract buyers. The fatter profit margins for SUVs are a financial lifeline to a Chinese industry that is being squeezed as global brands make inroads into the market for smaller cars. “You’ve got almost everyone targeting SUVs,” said Analyst Namrita Chow of IHS Automotive. SUV sales in China rose 20% last year to 2.5 million vehicles, more than double the 8% growth of the overall auto market, according to LMC Automotive. SUVs made up 18% of all vehicles sold. That market share could rise to as high as 25% in coming years, according to Yale Zhang, Managing Director of Auto Foresight, a research firm in Shanghai. That would be double the size of SUVs’ 12.5% share of the U.S. market last year. General Motors expects annual SUV sales in China to reach 4 million by 2020, said Bob Socia, President of GM’s Chinese unit. Global automakers are redesigning SUVs for China with smaller engines in response to government taxes based on engine size. Ford Motor plans to manufacture two of its four SUVs, the EcoSport and the Kuga, in Chongqing. Its Edge SUV will be imported from Canada and the Explorer from the United States. Italy’s Fiat, a latecomer to China, is hoping an SUV will help it gain a foothold in a market where it set up its first joint venture just three years ago. The Freemont, based on the Dodge Journey, was unveiled at last month’s Shanghai auto show. Mercedes Benz, Nissan, Geely Holding Group and Great Wall Motors also showed new SUVs or SUV concept vehicles. “Chinese consumers love SUVs. They see them as safe family cars,” said Chow of IHS Automotive. “The idea is, if I buy the best I can afford, I am buying the safest.” Baoding-based Great Wall Motors said SUV sales in the first three months of the year rose 95% over a year earlier and accounted for half the 180,000 vehicles it sold, giving it the global auto industry’s fattest gross profit margin at 28%, according to Bernstein Research Analyst Max Warburton.
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