A Hefei-based branch of Continental Corp, the leading German tire manufacturer aiming to become one of China’s top three tire makers and suppliers over the next few years, has vowed to enhance driving safety for Chinese customers. Michael Egner, General Manager of Continental Tires Hefei Co, which was set up with an investment of €185 million to manufacture premium tires, said that as Chinese people become more conscious of driving safety, Continental will take care of them. He said Continental Tires Hefei plans this year to produce 20-inch tires, self supporting runflat (SSR) tires and winter tires locally as part of its aim to produce 4 million passenger light truck (PLT) tires in the first phase of the Hefei plant. Statistics show total production in China, the world’s largest tire consumer, reached more than 483 million tires in 2012, accounting for about one third of global output. Yuan Zhou, Finance Manager of Continental Tires Hefei, said that last year Continental increased its investment in Hefei to €339 million, aiming for an annual production of 8 million PLT tires. The plant is designed to reach a capacity of 16 million tires and would eventually provide some 2,000 jobs to locals after extension work is completed. “Driving safety has lots to do with tires,” said Egner, stressing that Continental is renowned for contributing to enhanced driving safety and protection of the global climate. Located in the Hefei State Hi-Tech Industry Development Zone, Continental Tires Hefei is the largest foreign direct investment project to date in Anhui province. “Although the market share of Continental in China was less than 3% last year, we foresee huge potential in the future,” added Egner. “When the market becomes mature, people will be more conscious about the role of tires in driving. It is a matter of time, and I am confident in our products,” Egner said, as reported by the China Daily.

Changan Automobile Co is poised to make a historic breakthrough by having one of its joint ventures both producing and selling Chinese-branded cars at home and abroad. The Chongqing-based carmaker and the French automaker PSA Peugeot Citroen established their joint venture Changan PSA Automobiles Co in 2011 in Shenzhen. “Within the next three years, Changan cars produced by our joint venture with PSA will be sold in China and overseas,” said Ren Qiang, Changan’s Vice President. Changan has also set up joint ventures with Mazda, Ford and Suzuki. In 2011, 95% of total profits generated by all auto enterprises in China were from joint enterprises, and independent firms accounted for just 5%, according to a report released by the Chinese Academy of Social Sciences (CASS) last month. “Until now, none of the automobile joint ventures in China had ever introduced independent Chinese brands onto the market,” said Jiang Aiqun, Spokesman at Changan. Chinese automakers are seeking various opportunities to increase market share for their own brands in their fight against foreign counterparts. Companies including SAIC, FAW Group and Changan all plan to introduce middle- and high-end vehicles, a sector of the market now dominated by foreign brands. “By 2020, we plan to increase overseas sales of Changan cars to 25% of the brand’s total sales volume,” said Ren. In 2012, more than 1 million Chinese-branded cars were exported mainly by five leading companies: Chery Automobile, Geely Automobile, Great Wall Motors, GMAC-SAIC Automotive Finance, and Lifan Group, according to data from China Association of Automobile Manufacturers (CAAM). From January to April, Changan sold 710,000 units in total, a 23% year-on-year increase, and 10% higher than the industry average. Its independent brand sales reached 321,000, ranking it top among China’s brands, the China Daily reports.

German car brands are losing market share in Hong Kong as a weaker yen and a new emissions rule have made their Japanese rivals more competitive. The market shares held by BMW, Mercedes-Benz and Audi fell to 11.2%, 11.5%, and 7.1%, respectively, last month from 16%, 14.4% and 8.3% in December last year, internal sales data compiled by the Motor Traders Association shows. Toyota, which topped the city’s sales last year, gained a larger slice of the cake in May, 18.7%, up from 17.5% at the end of last year. Traders and dealers said the fall in the share of the European brands was expected, since most buyers purchased their cars before April 1 – the day when all but one of the 74 European “green” vehicles lost their entitlement to a tax break of up to HKD75,000, as the government raised the bar on what qualified as a “green” vehicle. Although many Japanese models also failed to make the revised “green” car list, many Toyota, Honda and Nissan models continued to qualify for the break. “European cars performed really well in the first quarter, as buyers wanted to catch the ‘last train’ of the tax waiver scheme. But Japanese cars are quickly catching up now,” said Johnny Ng, Managing Director of car dealer Inchcape. “The removal of the tax break did not put the price of European cars up by much, as the carmakers and dealers absorbed some of the increase.” Volkswagen’s Hong Kong Managing Director, Thorsten Jaede, said launching new models was the best solution to the change. The Golf 7, launched in March, helped boost local sales to 401 cars last month – up 21% from the average 331 of sales each month in the first quarter. Sales at BMW, Mercedes and Audi fell between 13.35% and 37% last month, compared with the average between January and March. The European Chamber of Commerce is pressing the government to review its tax incentive scheme, which it said is not entirely fair to European players. From April 1, the Environmental Protection Department considers cars “green” if their emissions are at least 75% below the maximum allowable level. Before then, cars that emitted less than 50% of the level would qualify.

General Motors, which broke ground on a new Cadillac assembly plant in China this month, forecast demand for luxury cars will grow at a slower pace in China than the total vehicle market this year. Sales of premium cars will probably increase about 4% this year, or about half the pace that the carmaker had expected at the start of the year, Bob Socia, GM China Chairman, said in Shanghai. The carmaker has said it expects total industry sales to increase about 7% to 8% this year. “Luxury car demand should hold at around 10% growth. GM’s estimate of 4% growth means they expect the segment will be pretty sluggish,” said Han Weiqi, Industry Analyst with CSC International Holdings in Shanghai. GM aims to more than triple Cadillac sales in China to 100,000 by 2015 as it brings out a new model every year until 2016. Chief Executive Dan Akerson, in Shanghai for the factory ceremony, has said the luxury brand is a priority in the firm’s plan to invest USD11 billion in China until 2016. The carmaker aims to win 10% of China’s luxury market by 2020. Luxury-vehicle sales rose at more than twice the pace of the total passenger-vehicle market last year, research firm LMC Automotive said. It will take some time for GM to catch up with Audi and BMW in luxury sales, Akerson said. Rising consumer incomes and growth in manufacturing capacity will help GM achieve its target of selling five million vehicles in China by 2015, Akerson added.

• Partnering with the event’s organizing committee, Volvo was the exclusive provider of VIP transportation for the Fortune Global Forum in Chengdu in May. The company also co-hosted a roundtable discussion titled “the Future of Transportation”. Volvo Chairman Li Shufu represented the company at major activities of the forum. Volvo’s factory in Chengdu will become operational later this year. Hakan Samuelsson, President and CEO of Volvo Car Group, said now is a time of rapid development for Volvo in the domestic market.
• In the first five months of this year, Volvo’s sales in China totaled 22,905 units, up 26.9% annually, despite the sluggish market. In May alone, it sold 4,415 units, up 24.4% annually, making China its largest market worldwide. Volvo plans to introduce six new models to China to further enrich its portfolio. On June 5, Volvo unveiled the 2014 S80L, an executive luxury sedan.
• Great Wall Motors defied the industry slowdown last year, as it sold 620,000 vehicles in 2012, up 28% year-on-year, higher than the industry average increase of 4.3%. Its share price jumped 103% on the Shanghai bourse in 2012, marking the largest increase among China’s publicly held car makers.
• Volkswagen and its Chinese partner SAIC Group signed an agreement to enhance their strategic cooperation, expand capacity at their Foshan factory in Guangdong province, which will start production this year, and set up a new plant in Changsha, Hunan province. The deal was signed during Premier Li Keqiang’s three-day official visit to Germany. The agreement is part of the German automaker’s plan to invest €9.8 billion in China by 2015. Volkswagen plans to establish seven new plants in China in the coming years to boost its local annual production capacity by more than 60% to 4 million units by 2018.
• China tops the list of countries where automotive CEOs expect their business to grow this year. In addition, nearly two-thirds of 90 automotive CEOs from 32 countries who are looking to China as a growth market intend to build or further expand their manufacturing capacity in the next 12 months, according to PricewaterhouseCoopers’ 16th Annual Global CEO Survey Automotive Summary. 32% of automotive CEOs said China is one of their top markets. Consulting firm McKinsey & Co said China’s passenger vehicle market will maintain an average year-on-year growth of 8% over the next decade.
• Honda Motor Co is boosting the localization of its research and development (R&D) in China. By the end of 2015, Honda plans to introduce 12 new models to China, including the mid-size sedan Crider, developed mainly by Chinese staff for China, and the multipurpose vehicle Jade. Honda plans to produce hybrid models in China within three years, which it says will result in cheaper prices. The company is targeting sales of 1.3 million units annually in the Chinese market before the end of 2015, said Seiji Kuraishi, President of Honda Motor (China) Investment Co.
• The listing of car parts-supplier Nexteer Automotive will offer investors an opportunity to get involved in the Chinese passenger-vehicle market, but the company is facing downward pressure on selling prices of its products as car markets in the U.S. and Europe slow down. Nexteer’s net profit fell three basis points to 2.7% last year, while its gross margin stayed at 12.3%. Sales fell 3.6% to USD2.2 billion. The company will launch three new electric power steering programs in the second half. Nexteer has 20 manufacturing plants, 10 customer services centers, and five regional engineering centers. Nexteer seeks to raise up to HKD2.5 billion through an initial public offering (IPO). Trading is due to begin on July 3.
• Wu Xiao’an, Chief Executive of both Xinchen Power and Brilliance Auto – a joint venture between Xinchen’s parent company Huachen and the luxury German marque that produces BMW cars in China – said Xinchen could emerge as a top-tier engine supplier to BMW. Wu was speaking on the sidelines of the company’s inauguration of a plant in Mianyang, Sichuan, which will produce the first batch of 25,000 BMW N20 engines next June. Brilliance Auto is doubling its engine capacity to 400,000 units with a new plant in Tiexi, Shenyang province, that will begin production in 2015. But that may still fall short of BMW’s long-term goal to sell 600,000 cars a year in China, nearly double its sales last year.
• Shanghai car plate prices fell for the third consecutive month at the June auction as speculation cooled. The average successful bid dropped to CNY77,823, down CNY2,980 from last month, while the lowest price shed CNY3,100 to CNY77,600, according to the Shanghai International Commodity Auction Co. These falls saw Shanghai car plate prices dip below the CNY80,000 psychological benchmark, which was first surpassed in February. In March, prices reached a record high of more than CNY90,000, after soaring 32.5% in the first three months of this year – more than for all of last year.
• Beijing Automotive Group Co, which manufactures vehicles with Daimler and Hyundai Motor Co in China, has set up a unit to spearhead acquisitions abroad, starting with Europe. BAIC International Development Co will be in charge of overseas acquisitions and investment as well as boosting international vehicle and parts sales. The carmaker plans to have CNY2.5 billion of profit from abroad with a sales target of 400,000 units by 2020.
• Cheng Guozhang, Executive President of Renault China, said the company will introduce 10 new models in the next four years and raise the number of its dealers by 60% to 185 in two years. Renault’s proposal of building a manufacturing base together with its Chinese partner Dongfeng Motor in Wuhan, Hubei province, has got the approval from China’s Ministry of Environmental Protection (MEP), but still needs the nod from the National Development and Reform Commission (NDRC) and the Ministry of Industry and Information Technology (MIIT). The production facilities are designed with capacities to produce 150,000 passenger vehicles and 150,000 engines per year.
• Up to 500 E150 electric cars produced by Beijing Auto will be given a CNY140,000  purchase subsidy along with a free car plate for their promotion in the capital. The money includes CNY20,000 promised by the carmaker, with the rest to come from the central Beijing governments. That means a customer only needs to pay CNY109,800 for the car, which carries a price tag CNY249,800.