Local auto industry faces challenges
18/6/2003 15:30
Shanghai's automobile industry is facing new challenges from the robust
growth of the Beijing and Guangzhou auto sectors, the Jiefang Daily reported
today.
The Shanghai Automotive Industry Corporation (SAIC), ranking No. 1
in the domestic auto sector, boasted a whole-year production value of more than
120 billion yuan (US$14.5 billion) to date, three times the total production
values of Beijing Automotive Industry Group and Guangzhou Automotive
Group.
However, the two auto groups have made great progress over the
past several years.
The Beijing Automotive Industry Group began to
cooperate with South Korea-based Hyundai Motor last year to produce Sonata
sedans, boasting sales revenues of 5.5 billion yuan in the first quarter of the
year, an increase of 202 percent from a year before.
The Guangzhou Honda
Automobile Co. Ltd, the main profitable subsidiary of Guangzhou Automotive
Group, can now produce 120,000 cars a year after productivity
expansion.
Guangzhou Honda, which won praise as the best domestic sedan
producer last year, introduced the US version of the Accord at the beginning of
this year and offered the models at a discount of 40,000 yuan, with an excellent
market reaction.
In contrast, the market share claimed by SAIC dropped
from 42 percent in the year 2001 to 37.4 percent last year.
The Beijing
and Guangzhou government are trying hard to support their automobile industries
to fuel local GDP growth.
According to the Beijing government development
blueprint, 500,000 cars are expected to be produced by 2005, with sales revenues
of 50 billion yuan.
Guangzhou will invest five billion yuan in the auto
industry this year, with the total car production value amounting to 100 billion
yuan within three years, accounting for nearly 20 percent of the total
industrial output in Guangzhou.
The rapid development of the Beijing and
Guangzhou auto industries greatly threatens SAIC, said an industry
analyst.
Car service sectors in Beijing and Guangzhou are booming, with
many international car finance companies such as Volkswagen and Ford ready to
launch business in Beijing.
Wendy Zhang/ Shanghai Daily news
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