China car times

The awaited union between China’s Chery and the UK’s Jaguar-Landrover is likely to go ahead later this year if the joint venture receives approval.

Various government ministerys have to approve the joint venture, the JV is expected to land in Changshu city, close to Shanghai, and will use the same facilities as Qoros, another Chery joint venture partner. Total investment is expected to peak at 12 billion RMB with both parties investing 6 billion RMB to see production reaching 130,000 units per year.

Chinese media reports indicated that Chery is currently looking to raise the funds for the JV with multiple Chinese banks, but this was denied by Chery’s General Manager Mr. Jin Yi Bo. Chery’s Chairman also revealed to Chinese press that Chery are preparing to IPO soon.

Rumors circulating on the internet last week indicated that Chery would supply the engines to Chinese made JLR products from their own expansive ATECO range which includes large displacement V6, turbo assisted mid range displacements and smaller sub 1.0L units, although the chances of Chery engines being fitted in England’s finest is still rather slim.

JLR’s move into the Chinese market comes somewhat late when compared to German manufacturers who introduced themselves into China over a decade ago, or in Audi’s case two decades ago. JLR’ has seen its sales figures rise in China considerably, last year Land Rover sold 34,993 cars in the Chinese market, a sales increase of 58% over 2010, Jaguar sold 3897 units.

SEAT has aired its wares at various auto shows around China over the past two years, the Spanish brand is eager to enter into China to offset slow sales in Europe. The Spaniards are pushing the Leon Cupra first but other models are expected to follow rapidly, 8 dealerships have so far been set up across key Chinese automotive markets.

James Muir, Chairman of SEAT, said: “SEAT has arrived in China. We are launching our success story on this market with our state-of-the-art, attractive city showrooms and with the SEAT Leon as the entry model.

“Here in China, we are observing a groundswell of increasingly discerning customers that want to differentiate themselves with their cars. SEAT stands for emotional design and state-of-the-art engineering, for guaranteed driving fun mile-for-mile. Our unique combination of design and performance, of technology and precision secures for us an enormous potential within this key marketplace.”

The SEAT dealer network in China has planned to expand further over the next few months, reaching 15 operations by the end of 2012. This summer will see showrooms open in Guangzhou, Hangzhou, Nanning, Xi’an und Xiamen, with Beijing and Shanghai following.

The Leon Cupra is on sale in China from 240,000RMB to 290,000RMB.

So sayeth Bloomberg:

Chinese dealers are struggling with the rising number of unsold cars that’s threatening to deepen price cuts, according to the nation’s biggest automobile dealers’ association.

Dealerships for Honda Motor Co. (7267), Chery Automobile Co., BYD Co. (002594) and Geely (175) Automobile Holdings Ltd. carried more than 45 days of inventory as of the end of April, exceeding the threshold that foreshadows debilitating price cuts, Su Hui, vice president of the auto market division at the state-backed China Automobile Dealers Association, said in an interview yesterday.

“Unsold cars are crowding dealer lots in cities from Guangzhou in the south to Xi’an to the west,” Su said in a phone interview yesterday from Beijing. “It’s like a contagious disease that will spread.”

The warning signals that vehicle deliveries reported by companies, which have risen more than analysts’ estimates for the past two months, aren’t fully translating to consumer sales. Demand was the slowest in the first four months since 1998, weighing on automakers from General Motors Co. (GM) to Volkswagen AG (VOW), which are counting on the world’s largest auto market to offset slumping sales in Europe.

The Geely XC90 is on its way, if you believe Chinese media reports.

Volvo has handed the XC90 platform over to its Chinese owners ahead of a new version launching in 2014, the National Business Daily is reporting that Geely will use the XC90 platform to develop yet another high end brand for the Chinese market with the XC90 being the highlight of the new brand. The agreement to hand over the XC90 to Geely was signed on March 9th of this year, but it is not yet clear if any other vehicles were included in the transfer. The next generation XC90 is currently in development and will hit the market in 2014.

The XC90 is no new vehicle, the P2 platform on which the XC90 is based was first aired in 1999 and was developed prior to the Ford purchase of Volvo, the same platform underpinned several cars such as the S80, Ford Taurus and Lincoln MKS sedan

Geely launched their first SUV at the Beijing Auto Show, the GX7 SUV is the first AWD product from the company, the compact SUV is powered by a 1.8L engine and a six speed manual gearbox.

Chang'an DS5 - The French Presidents Choice

The new French president got into the swing of things in his new role as the leader of the 5th French Republic, François Hollande knocked the former prez,  Nicolas Sarkozy, out of office.

Hollande won on the back of an anti austerity campaign, he clearly believes that the people shouldn’t have to pay for the banks and governments mistakes, but that has not stopped him from installing his own austerity campaign in the presidential garage. Hollande’s presidential car has been announced as a Citroen DS5, a hybrid family car and more importantly, a hybrid with French style. A 2.0L Diesel with an electric motor to help drive the rear wheels, nothing spectacular when compared to the British Prime Ministers own Jaguar XJ, and certainly nothing compared to Obama’s Beast of a Cadillac.

Imagine the Chinese president driving around in a regular family car, actually don’t bother as its something that is never likely to happen. Chinese netizens are in agreement, many shared their shock online that the president of a major leading economy dares to drive in a 350,000RMB car.

When Auto.163.com reported on Hollande’s new choice of cars, netizens let their voices be heard with over 5000 comments being posted within a few hours, mostly in support of the presidents choice of automobile. Here’s just a sample:

France is so poor! Their president cars are not as good as our village leaders cars!

The French presidential car is no where near as good as the cars bought by Yu Shu Local Government after the earthquake

I welcome Hollande to be a Chinese village leader, he will get a better car!

My village leader has a Rolls Royce!

The DS5 is beautiful!

In China, this car would be destroyed by second generation rich Chinese, and nobody would notice

This is what I call supporting your country’s goods!

Chinese consumers will be able to get their hands on the French presidential car in the second half of the year when the DS5 is imported into China, eventually the car will be produced locally via the Chang’an-PSA line up which will likely see DS5′s rolling down the production line by the years end.

update: Changed the displacement, thanks for the point out!

Remember the man that spat his dummy and destroyed his Lambo in Qingdao? It turns out that he is back in town and trying his hardest to get everyone to know about his Lambo destruction derby he had last year. The Qingdao car show opened earlier this week and Lambo man was back with his car on the back of a flatbed truck, probably because the car is non-drivable after his HULK SMASH session, his sole goal being to get press attention to his knackered Lambo.

After the initial smash attack it emerged that the owner bought the car second hand from Germany, he had some problems with it and took it to the local Lamborghini dealer to be fixed, upon returning the car the owner claimed there was additional scratches on the car that didn’t exist before. He says Lamborghini caused them, Lamborghini says they didn’t, the owner became enraged when Lamborghini apparently ignored him and took hammers to his own car to get ‘revenge’ and now takes the flat looking car to various car shows to highlight Lamborghini’s allegedly poor service.

From Reuters:

The central government has allocated 6 billion yuan ($949 million) to subsidise consumer purchases of fuel-saving cars, Xinhua News Agency reported late on Wednesday, putting a cumulative figure for the first time on the handouts as it moves to cut emissions in the world’s biggest auto market.

Beijing started offering a 3,000 yuan rebate on consumer purchases of small, fuel-efficient cars in June 2010, but has not previously indicated the total cost of the subsidy.

In September last year, the government raised the bar to make the subsidy available only to purchases of cars with an engine displacement of 1.6 litres or smaller that consume 6.3 litres of gasoline or less per 100 km, compared with the previous limit of 6.9 litres.

Beijing has also been encouraging its fledgling electric car industry with hefty incentives, including subsidies of up to 60,000 yuan for each vehicle sold.

A green vehicle development plan approved by the State Council in April set a cumulative output target of 5 million hybrid and electric vehicles (EV) by 2020. ($1 = 6.3222 Chinese yuan)

How do you say poverty specification, i.e. the lowest possible specification of a car in Chinese? Well you call it 乞丐版 (Qi Gai Ban) which translates into beggar edition. The X1 already weighs in at under 300,000RMB for the base model in rear wheel drive model only, the 2.0T jumps in at 360,000RMB but all come with automatic gearboxes as standard, for those that have a love of shifting their own cogs they will have to wait until later this year when BMW launch a manual version, aka the Beggar Version.

So what’s missing? The GPS/DVD system has gone, as has the obvious automatic gearbox which has been replaced with a six speed manual. The headlights have been changed for lesser versions and the headlight washing facility has been removed (does anyone use this anyway?)

Manuals only seem to come on base models in the Chinese market. Try to buy a top of the line sedan with a decent turbo or V6 engine and you are looking at slush boxes exclusively, and if you do get a manual, you can bet that it will only be on the bottom of the range model.

So when will the X1 with basically all options deleted hit the market? Second half the year. And how much? We can guess at 260,000RMB to 270,000RMB. Is that expensive for a small SUV? Yes. Will Audi finally launch a 1.8T Q5 in response? We hope.

CCT is popular. Many people like it, a minority don’t. Personally I hardly ever remove comments, the only comments that get removed  are comments that:

a) Actively attack other members, going beyond the realm of gentlemen-like discussion and into personal attack

b) Irritate the admin, me, or other writers with personal attacks. Conflicting opinions are welcomed, perhaps you have a thought or comment to add, that is fine, comments that attack the writer/author/admins with vulgar language are removed.

Some users seem to meet the above criteria, but hardly ever go over it, occasionally though one goes too far and irks my attention. The person in question seems to enjoy sending rude emails and putting fake addresses through the newsletter subscription form, of course we have the IP address of the user who is up in Jinan, Shandong province. We could report it but realistically I cant be bothered, let’s just hope the user in question grows up.

Let’s keep the fun going in the meantime. CCT is great, and will continue to bring the best news out of the Chinese car industry.

What’s 10RMB? Its $1.50USD, but to this man it was obviously worth fighting over.

In August 2011 Wu Hua Xian Tong Yuan’s Toll booth had a case of violence against a toll booth worker, one driver, in a bid to avoid paying a 10rmb highway fee bit the ear of a worker and escaped from the scene. A 3:45am a car with the Guangdong A plate left Wu Hua County on its way to Guangzhou City, at the toll booth the driver told the worker that he was a local resident and therefore didn’t have to pay the 10RMB fee, the worker advised otherwise, suddenly the driver made a jumpfor the worker and got his teeth into his ear, he lost a 4cm strip of ear in the process.

The driver fled the scene and remained on the run until recently, obviously toll booth security cameras are not that clear on picking up license plate numbers. The police caught up with the perp as he was sitting in a restaurant in Guangzhou. The 33 year old male is now in detention pending an investigation. Journalists were able to talk with him while in prison, where he admitted to being drunk at the time of the incident

BMW proved a point in the Chinese market, they successfully demonstrated that Chinese will buy premium small cars. For the longest time small cars equaled cheap cars in the Chinese pysche, BMW’s introduction of the MINI range, and later the 1-series range through the market on its head. Small cars selling for the same price as mid size sedans were suddenly in vogue and the market only improved as incomes became higher and a new mindset emerged.

BMW introduced the second generation 1-series in late 2011, with a 1.6T engine and also a naturally aspirated version, earlier today BMW also introduced the six cylinder 125i model which is priced in at 370,000RMB.BMW is hoping to play catch up with Audi in 2012, Audi has managed to hold onto a long headway in the Chinese market, largely thanks to its early market entry in comparison to its rivals.

Landwind’s SUV offerings have been weak to say the least, their first product became the poster boy for poor Chinese quality cars in Europe and derailed any plans for a Chinese automotive invasion of the EU in the short term. Landwind went back to the drawing board, their X8 SUV came out but obviously it still wasn’t good enough for Europe, or the Chinese market, sales were relatively low in a SUV loving market, the next step is yet another SUV.

Landwind are potentially borrowing the 1.5T engine from the Chang’an Eado sedan and are preparing to mate it to an 8 speed gearbox, the final product should hit the market later this year. The new SUV is expected to be using an 8 speed gearbox developed by Shengrui in Shandong province, the unit hasn’t yet hit the market but is expected to be hitting Chinese cars soon.

There used to be a British company that had multiple models that competed with each other throughout their product range, that company was called British Leyland. VW seems to be entering BL territory in China with its multitude of products that overlap and outright compete with each other, the Lavida is up against the Bora, the Passat against the Magotan. Now its going to be Lavida hatch v’s the Golf, and then we can almost guarantee that there will be a Bora hatchback coming from FAW-VW before long.

The Lavida has already been a big seller for SH-VW since its introduction in 2009, the model uses the same 1.4TSI engine as the China market Golf and also the same naturally aspirated 1.6L engine as well as dual clutch gearbox. The Lavida was developed in house by Shanghai-Volkswagen, the Bora was also redeveloped by FAW-VW as a reaction to both demands from VW’s Chinese partners for new compact cars to engage the lower end of the Chinese market. The Chinese automotive media also seem to like the Lavida, although many reviews have noted that the interior and some of the work is not as high as other VW models. The VW hatch is supposedly readying to launch in 2013, VW’s own production schedule indicates that the Lavida hatch will take up a small percentage of production volume with the sedan continuing to be the big daddy for the SH-VW production lines.

Eterniti, the British auto maker, sold its first 4 cars at the Beijing Auto Show last month according to a press release issued by the company. The Artemis SUV had its Asian debut at the Beijing Auto Show and seemed to resonate well with Chinese consumers, despite the price tag being in excess of 2.10 million RMB.

The 600BHP SUV will only see sales of 30-40 units worldwide this year, with early sales of 4 units in China it seems that the company maybe on the right track.

How many Jetta’s in China? It’s a good question.

First of all you have the mark 2 from 1984 which is the ultimate heir to the Jetta nameplate, later FAW-VW introduced the modern mk4 version which Euro’s called the Bora and Chinese did too, although China got a Bora R version which used the then mk 4 GTI’s engine. A sort of mk4.5 version wheeled out of FAW-VW with a facelift, the outgoing mk4 Golf also became the Bora hatchback as well. Later the mk 5 version arrived on Chinese shores, except this was called the Sagitar. The Sagitar was a hit from the get-go, thousands of units were sold each month, Chinese consumers loved the Sagitar and it quickly became the compact sedan to own, especially when compared with the then Ford Focus and its out of date tech. The Sixth Gen was wheeled into China in early 2012 with sales beginning a few months ago, with 1.4TSI, 1.6L and 1.8TSI engines mated to a mixture of 5 speed manual and 7 speed dual clutch gearboxes.

Now the Jetta NF is being readied for end of year production, at least according to reports. Chinese media are reporting that the NF stands for ‘Nachfolger’ which apparently means ‘Successor’ in the German language, but being bound by just two languages I have no idea. According to documents leaked to the internet, the NF project was kick started back in 2008 and final design was completed in Nov 2011 and road testing starting just after, March 2012 saw the start of small scale production. Further documentation indicates that production will happen in two factories at the same time, firstly production will begin in Changchun in Sept and production starting again in Chengdu in early 2013. Monthly production is expected to hit 11,000 units per month from March 2013. Early sales are expected to be as low as 50,000 in 2012 but by 2019 FAW-VW have a sales goal of 350,000 units per year, presumably when all the mk 2 Jetta taxis currently in circulation need replacing.

The NF is expected to sit on the current Polo platform which will be of course shared with the Skoda Rapide when that also sees production later this year. We can guess that engine power will also be the same as the current Polo, thus 1.6L engines will likely be the core power plants, although a smaller 1.4L cannot be written off yet!

Chery’s A3 has been a rallying point for the company, the Italian designed hatch and sedan showed that Chery was moving away from odd designed vehicles and trying its best to keep up with the automotive world’s latest design trends. When the A3 aired it was arguably the best looking Chinese hatchback on the road, but that was 2009 and no major updates have come to the car in the past 3 + years, the competition have caught up too with nearest rivals Geely and JAC also introducing their own equally handsome vehicles.

The A3 comes with 1.6L and 1.8L engines with manual and automatic gearboxes available, a 1.3 supercharged car was once in the works but no news about this model has surfaced recently. The above pictures show that the A3 is undergoing a nip and tuck, possibly to bring the A3 into line with a new corporate face from Chery. Chery is one company that seems to have multiple design themes running through its expansive model line up, hopefully sometime in 2012/13 we will seen the range become more coherent.

One car that we didn’t actually report on during the Beijing Auto Show last month was Fiat’s fantastic looking Viaggo. A while back we reported on rumors that Fiat’s forthcoming Chinese compact sedan was a facelifted Dodge Dart for the Chinese market, we weren’t entirely wrong, the facelift was a little bit more substantial than a mere badge swap, it’s largely a new car.

Fiat also announced the cars name: 菲翔 (Fei Xiang). Now the Chinese press are taking a lot of interesting the Viaggo (菲翔) ahead of its launch, the most recent reports indicate the Viaggo will hit the market in September this year with one confirmed engine: a 1.4T, although naturally aspirated units are expected to follow.

Selling the Fei Xiang under any other brand wouldn’t be a problem, but Fiat suffers from some brand damage after its pull out of the Chinese market in 2006 after the collapse of the Nanjing-Fiat joint venture where Nanjing Auto were blamed for putting too much effort into their then new MG project, and Nanjing taking flack due to its lack of investment in new models for the Chinese market. Fiat has much work to do in rebuilding consumer confidence in the Fiat brand, the Fei Xiang is the perfect step forward but the model does have strong competition. The VW Sagitar and Ford Focus are both strong models in this segment and hold some sway over the market, hopefully the Fiat Viaggio will be enough to establish a beach head before the introduction of more models.

Back in 2009 strange beasts started to appear on Chinese inner city roads. At that time luxury car sales were just picking up and it seemed that everyone and their mother had a Ferrari or Lambo in their garage, so people wanting to stand out from the crowd opted for trucks, full size American trucks. Ford F150 Raptors, Twin Axel Super Duty, F150 Harley Davidson, and Toyota Tundra’s became semi regular sights on Chinese roads, the only problem being that the City Police often ban commercial vehicles from inner city roads and pick up trucks are classed as commercial vehicles.

Suddenly the novelty of having a full size truck and not being able to drive down the city’s main strip showing off your man toy evaporated. Gray market distributors had full size trucks on their hands and no where to sell them to, what’s the point in sitting in traffic guzzling down 9RMB per litre fuel in your 6.7L truck if no one can see you?

One GMC dealer in Shanghai has come up with a novel solution to the above problem: Give away the fuel. Every buyer of a GMC Denali truck will receive 5,000KG of 97# fuel for free. The Denali is priced in at 850,000RMB ($134,000USD) in Shanghai, but more like $50,000USD back in the US of A. So why announce 5 tons? 5 tons of fuel works out to be about 50,000RMB’s worth of fuel, but gathers better headlines than a 50,000RMB discount.

From Reuters:

Volvo’s Chinese owner offered to take a large minority stake in the Japanese maker of Subaru cars, an offer – never accepted – that illustrates its ambition to expand business in China and around the world and gain more technology to improve its own cars.

Two sources with direct knowledge of the matter said Zhejiang Geely Holding Group offered to buy a stake of about 20 per cent in Japan’s Fuji Heavy Industries late last year through an investment banking intermediary.

If the bid had been successful, it could have paved the way for a joint-venture company in China to produce Subarus which currently have to be brought in from abroad.

China has been the world’s biggest auto market by volume since 2009.

By taking over Volvo and now possibly another foreign brand, Geely wants not only to expand its business around the world quickly but use their technology and auto design and manufacturing expertise to improve its own-branded cars.

Whether Geely can be successful in that endeavour also has broader implications for corporate China’s global expansion.

Chinese companies have poured tens of billions of dollars into foreign acquisitions in recent years – much of it into resources businesses – but they have had little success digesting and managing major consumer brands.

Geely’s interest in Fuji Heavy ‘sounds like a good strategy’, said Mr Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight.

Volvo is a premium brand and Geely’s own brands in China are all affordable low-end brands.

‘Fuji Heavy could have filled the gap in the middle of product offerings Geely has,’ Mr Zhang said.

A 20 per cent stake would have made the Hangzhou-based automaker the biggest shareholder in Fuji, ahead of Toyota Motor, which currently has a 16.5 per cent stake.

The sources said Fuji Heavy never responded to the offer.

Mr Kenta Matsumoto, a Tokyo-based spokesman for Fuji Heavy, said he was not aware of an acquisition offer from Geely.

A Geely spokesman declined to comment.

Fuji Heavy, known for its all-wheel-drive technology, had applied for a joint venture to produce cars in China with Chery Automobile, one of the country’s few remaining major automakers with no foreign partner.

China requires foreign automakers to partner a local company with a stake of up to 50 per cent to build cars in the country for local consumption.

Beijing objected to the move since it viewed Toyota Motor, Japan’s top automaker, as effectively controlling Fuji Heavy and pointed out that Toyota already has two local Chinese partners – the maximum number of joint ventures allowed for a foreign auto maker to operate in China.

Chery earlier this year announced that it picked Jaguar Land Rover, a unit of Indian group Tata Motors, as a possible joint-venture partner.

On Tuesday, Fuji Heavy executives said in Tokyo the company no longer expected to be able to start local vehicle production in China during a five-year growth plan that runs until March 2016, and lowered its global sales target for the final year by 50,000 vehicles.

Geely’s offer, according to the knowledgeable individuals, was aimed at overtaking Toyota as the largest shareholder in Fuji Heavy, making it possible for the Chinese government to give the necessary blessing for Geely and Fuji Heavy to form a China joint venture.

Geely founder and chairman Li Shufu, who is also Volvo chairman, was willing to reduce Geely’s stake in Fuji Heavy once the joint venture was approved, the individuals said.

It was not immediately clear whether Geely had talked to Toyota before extending the acquisition offer to Fuji Heavy.