China’s SAIC drives into booming southern China car market with new US$790 million plant
China’s largest carmaker by capacity says the plant, which will make its MG and Roewe models, may serve as a base for future exports to Southeast Asia
SAIC Motor, China’s largest carmaker by capacity, is building an assembly plant in China’s southeastern Fujian province to give it a presence in the fast-growing regional market and also act as a possible base for exports to Southeast Asia.
The Shanghai-based carmaker has started construction of the 5 billion yuan (US$790 million) plant in Ningde in Fujian, which will have an annual capacity of 240,000 passenger cars. The plant will make SAIC’s MG and Roewe brand vehicles, according to a statement on Saturday.
The new facility, which will start production in late 2019, is SAIC’s fourth plant for the two brands in China, after Shanghai, Nanjing in Jiangsu province and Zhengzhou in Henan province.
“SAIC aims big with its indigenous brands, and the new base can help it be more agile in responding to fast-growing demand in southern China, including in the big-selling Guangdong province,” said Cui Dongshu, secretary general of the China Passenger Car Association.
SAIC created the Roewe marque in 2006 based on Rover technology it bought from failed British carmaker MG Rover in 2005. It has also owned the MG brand since 2007, after acquiring the brand’s previous owner, Nanjing Automobile.
In China, SAIC also makes Buick and Cadillac cars with US auto giant General Motors, and assembles the Passat and Tiguan models with Volkswagen, the world’s largest carmaker, at plants in a dozen Chinese cities.
SAIC said the new plant would allow for faster delivery of its cars to the regional market, while it would also benefit from deeper cooperation with car parts and logistics companies in the region. It would also be able to offer financing and faster after-sales service.
It also said that the plant would allow it to reach out to the Southeast Asian markets, but did not elaborate.
SAIC had its best year in 2017, with sales rising by 6.8 per cent to 6.93 million units, more than double the Chinese car industry’s average growth pace. It was propelled by sizzling growth in sales of MG and Roewe models, which jumped 62 per cent on year to more than 520,000 units.
The strong momentum stayed in the first quarter, with sales of the two brands growing at 54 per cent, or five times its average total vehicle sales growth in China of 10 per cent.