SAIC rolls out 20b yuan plan to make and develop own-brand cars
SAIC Motor Corp, the country's largest carmaker, will invest 20 billion yuan over the next five years to design and develop its own passenger cars.
The company planned to roll out about 20 new self-branded models in co-operation with South Korea's Ssangyong Motor, company president Chen Hong said yesterday.
SAIC, which increased its stake in Ssangyong to 51.33 per cent in July last year, will develop four of the five lines of new cars priced between 65,000 yuan and 300,000 yuan each.
Until recently, SAIC has been known for assembling cars for General Motors and Volkswagen.
Ssangyong, whose sports utility vehicles (SUV) account for 74.1 per cent of its domestic sales, will develop one new car line.
According to a report by Korea Investment & Securities, Ssangyong is facing growing competition in its home market due to the entry of GM Daewoo in July last year and frequent roll-outs of new SUVs by Hyundai Motor and Kia Motors.
Ssangyong has forecast a 12 per cent increase in sales this year to 129,834 vehicles, with 62,868 units to be sold domestically and 66,966 overseas.
The company estimates it will sell 140,200 vehicles next year: 65,200 in Korea and 75,000 abroad, according to a report by Hannuri Securities.
Mr Chen said he hoped Ssangyong eventually would be able to fully utilise its output capacity of 250,000 units annually. SAIC expects to sell 1.5 million vehicles in the mainland this year, an 11.9 per cent growth over last year.
The company, which operates a separate joint venture with Volkswagen and General Motors, in July said it would sell eight billion yuan of bonds to help fund the development of self-branded cars.
In December last year, the company streamlined its corporate structure to prepare for developing such cars.
SAIC launched its first self-branded car, the Roewe 750 series, early this year, based on technology and designs bought from MG Rover in 2004. The mid-range cars are priced between 230,000 yuan and 320,000 yuan.
The company is in talks with Nanjing Automotive Group, which bought the defunct British MG Rover in 2005, for a possible merger.
SAIC chairman Hu Maoyuan in April said that co-operation between the two carmakers was a way to enhance synergy for making self-branded cars.
Getting into gear
The number of own-brand cars SAIC will produce in the next five years: 20