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Chang'an pushes for overseas expansion

 

Chang'an Automobile (Group) Co, China's fourth-largest automaker, will invest $820 million in 10 major global markets by 2020, a company executive said.

It aims to sell 400,000 vehicles annually outside China by then, said Vice-President Zhu Huarong at the ongoing Frankfurt Auto Show in Germany.

"To make Chang'an a true international automaker, a strong foothold and long-term perspective are crucial," Zhu said.

Chang'an will focus on further development in 10 major overseas markets, including Iraq, Algeria, Chile, Colombia, Peru and Ukraine.

"We will establish three major overseas manufacturing bases in Russia, Brazil and Iran, with about in $700 million investment, by 2020," said Zhu.

"Another $120 million will be used for distribution channels and branding in our targeted markets."

He told China Daily that Chang'an also has ambitions to move into the mature and challenging Western markets.

"We'll study the proper way to enter European countries, the United States and other markets," said Zhu.

Assuming those plans succeed, Chang'an will have 810 dealerships overseas by 2020, said Zhu. The company will generate 30 percent of total revenue outside China by then, with 5 percent coming from Europe and the US.

Participating in the Frankfurt Auto Show for the second time, Chang'an is exhibiting six models to European visitors, with a world premiere for its mid-sized sport utility vehicle, the CS75.

The vehicle was developed in conjunction with Chang'an's research and development centers in Italy and the United Kingdom, the automaker said. That process allowed it to make full use of its European design and engineering resources. The CS75 is targeted at the domestic and international markets.

Shanghai-based research firm IHS Automotive forecast that Chang'an's three CS models, which include the CS35 and CS95, will comprise a complete SUV "family" for the Chongqing-based company.

"The CS75 will likely see annual domestic sales of about 30,000 units by 2015," said IHS Automotive light vehicle sales forecast analyst Wang Zeng. "The model will compete with the S6 SUV built by BYD Auto in China."

Chang'an has in recent years invested in opening R&D centers in Turin, Italy, Nottingham, UK, Yokohama, Japan, and Detroit, US, in addition to its R&D center in China.

"Going to the US and Europe is much more than building a car that can meet the certification standards," said Lin Huaibin, IHS Automotive's vehicle sales forecast manager.

Beyond certification standards, he said, there are requirements that could take several years for Chinese automakers to achieve - such as warranties, insurance and dealership networks. There's also the issue of raising brand awareness in Europe and the US and competing against the established international automakers.

"The markets that Chang'an has exported its models to this year include about 20 different markets.

"It's expected that Chang'an will continue to push exports in these emerging markets, while simultaneously raising the standards of its vehicles," said Namrita Chow, manager and senior analyst at IHS Automotive.

 

 
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