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Made in Hangzhou: Auto industry gears up to wheel out cars
By Jin Jing |
July 22, 2009, Wednesday
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Print Edition
Print Edition
HANGZHOU'S auto industry is in overdrive to meet the needs of the country's burgeoning car market. Jin Jing takes the wheel. Hangzhou is boosting its passenger car industry, building new factories for autos and parts, and making vehicle manufacturing a pillar of its economy. Green cars are part of the plan.
At a ceremony in late May, a new minivan model, the Xingwang, rolled off the assembly line at a brand-new facility of the Zhejiang Gonow Auto Co Ltd. More than 1,000 guests applauded.
Three more auto makers have started construction nearby.
The assembly of the small, 1.0-liter vehicle marked the official opening of the factory in Jiangdong Auto Industrial Park, 40 kilometers from downtown in the southeastern part of Hangzhou.
The vehicle, bearing a "Made-in-Hangzhou" sticker, also opened the city's new era of vehicle manufacturing.
The Jiangdong Auto Industrial Park covers 35 square kilometers in the Xiaoshan Economic Zone. It's a major part of the city's auto making blueprint.
Under the blueprint, about 100 million yuan (US$14.64 million) will be allocated each year to support the industry, including funding technology upgrades.
The government aims to attract both major domestic and international auto makers to produce passenger vehicles - cars, SUVs and minivans. New, fuel-efficient and clean energy vehicles will be major products.
Plans also call for expanding the auto parts sector, focusing on engines, steering systems, powertrains and interiors.
The goal is to increase sales revenue from the car industry to 20 million yuan by 2015, building the city into a national auto and spare parts export base. The current figures are not available.
Hangzhou is home to a few of China's leading coach and commercial vehicles manufacturers, but it lacks major passenger car makers. And China has become the world's biggest passenger car market.
By boosting the auto industry, the Hangzhou government is counting on huge economic benefits to help the Zhejiang Province capital city sustain its rapid economic growth, despite already intense market competition and concerns about overcapacity.
Last opportunity
"Oversupply in the auto industry always exists," says Hangzhou Mayor Cai Qi. "But this helps to make it competitive and drives low-quality vehicle manufacturers out of the market.
"If we would want to gear up the auto industry, this would be the best and maybe the last opportunity," he says.
Besides privately owned Gonow, three other car makers have also started construction in the industrial park. One is Zhejiang Jinhua-based Youngman Lotus, a joint venture between Youngman Auto Group and Lotus Engineering, an affiliate of Proton.
The other two are Youngman Commercial Vehicles Co and Luxgen (Hangzhou) Motor Co, the mainland venture of Taiwan's largest automotive group, Yulon Motor.
The Gonow production base in Hangzhou will be its biggest plant and a key part of the group's strategy, according to Wang Zhuangzhi, vice president of Gonow Group, also in charge of the new plant.
Gonow plans to move its headquarters from Taizhou to Hangzhou as well. The plant has stamping, welding, painting and assembly lines as well as test roads, parking, R&D center and dormitories for around 800 employees. When the entire complex is completed, it will have an annual capacity of 250,000 vehicles and 250,000 engines.
Besides its Taizhou (Jiangsu Province) base and Dongying (Shandong Province) base, which produce pick-ups and SUVs, the Hangzhou base will focus on mini vehicles. In addition to the Xingwang minivan, a micro-truck will be added to the assembly lines next year.
"The local government wanted us to unveil the Xingwang in June and start production in September," says Wang. "But we beat the timetable."
Gonow more than doubled its sales target to 60,000 vehicles this year, and about 10,000 of them will be made by the Hangzhou plant.
Like Gonow, Youngman Lotus also added the Hangzhou plant to two others in Guizhou and Shandong provinces. The output of the Hangzhou base will be twice as big as the combined output of the other two.
"The new plant in Hangzhou enables us to set up the sales network much more quickly," says Wang Shunsheng, executive general manager of Youngman Lotus Sales Co Ltd.
If it obtains production permission, Youngman Lotus will unveil its made-in-Hangzhou Europestar Lotus RCR ("Jingsu") as early as September. The car maker plans to double its dealer network to 120 this year, covering all big cities in Zhejiang Province.
The latest entry, Luxgen from Taiwan, is leveraging its efforts to tap into the Chinese mainland auto industry through its new Hangzhou factory. It capacity will be 240,000 units every year.
The first phase of construction will have an annual output of 120,000 vehicles and 200,000 engines in addition to an engineering center.
According to Li Junzhong, deputy manager of Yulon Group, the first model will be an SUV with a 2.0-liter turbo engine. Four new models are expected to be launched within one or two years.
At a ceremony in late May, a new minivan model, the Xingwang, rolled off the assembly line at a brand-new facility of the Zhejiang Gonow Auto Co Ltd. More than 1,000 guests applauded.
Three more auto makers have started construction nearby.
The assembly of the small, 1.0-liter vehicle marked the official opening of the factory in Jiangdong Auto Industrial Park, 40 kilometers from downtown in the southeastern part of Hangzhou.
The vehicle, bearing a "Made-in-Hangzhou" sticker, also opened the city's new era of vehicle manufacturing.
The Jiangdong Auto Industrial Park covers 35 square kilometers in the Xiaoshan Economic Zone. It's a major part of the city's auto making blueprint.
Under the blueprint, about 100 million yuan (US$14.64 million) will be allocated each year to support the industry, including funding technology upgrades.
The government aims to attract both major domestic and international auto makers to produce passenger vehicles - cars, SUVs and minivans. New, fuel-efficient and clean energy vehicles will be major products.
Plans also call for expanding the auto parts sector, focusing on engines, steering systems, powertrains and interiors.
The goal is to increase sales revenue from the car industry to 20 million yuan by 2015, building the city into a national auto and spare parts export base. The current figures are not available.
Hangzhou is home to a few of China's leading coach and commercial vehicles manufacturers, but it lacks major passenger car makers. And China has become the world's biggest passenger car market.
By boosting the auto industry, the Hangzhou government is counting on huge economic benefits to help the Zhejiang Province capital city sustain its rapid economic growth, despite already intense market competition and concerns about overcapacity.
Last opportunity
"Oversupply in the auto industry always exists," says Hangzhou Mayor Cai Qi. "But this helps to make it competitive and drives low-quality vehicle manufacturers out of the market.
"If we would want to gear up the auto industry, this would be the best and maybe the last opportunity," he says.
Besides privately owned Gonow, three other car makers have also started construction in the industrial park. One is Zhejiang Jinhua-based Youngman Lotus, a joint venture between Youngman Auto Group and Lotus Engineering, an affiliate of Proton.
The other two are Youngman Commercial Vehicles Co and Luxgen (Hangzhou) Motor Co, the mainland venture of Taiwan's largest automotive group, Yulon Motor.
The Gonow production base in Hangzhou will be its biggest plant and a key part of the group's strategy, according to Wang Zhuangzhi, vice president of Gonow Group, also in charge of the new plant.
Gonow plans to move its headquarters from Taizhou to Hangzhou as well. The plant has stamping, welding, painting and assembly lines as well as test roads, parking, R&D center and dormitories for around 800 employees. When the entire complex is completed, it will have an annual capacity of 250,000 vehicles and 250,000 engines.
Besides its Taizhou (Jiangsu Province) base and Dongying (Shandong Province) base, which produce pick-ups and SUVs, the Hangzhou base will focus on mini vehicles. In addition to the Xingwang minivan, a micro-truck will be added to the assembly lines next year.
"The local government wanted us to unveil the Xingwang in June and start production in September," says Wang. "But we beat the timetable."
Gonow more than doubled its sales target to 60,000 vehicles this year, and about 10,000 of them will be made by the Hangzhou plant.
Like Gonow, Youngman Lotus also added the Hangzhou plant to two others in Guizhou and Shandong provinces. The output of the Hangzhou base will be twice as big as the combined output of the other two.
"The new plant in Hangzhou enables us to set up the sales network much more quickly," says Wang Shunsheng, executive general manager of Youngman Lotus Sales Co Ltd.
If it obtains production permission, Youngman Lotus will unveil its made-in-Hangzhou Europestar Lotus RCR ("Jingsu") as early as September. The car maker plans to double its dealer network to 120 this year, covering all big cities in Zhejiang Province.
The latest entry, Luxgen from Taiwan, is leveraging its efforts to tap into the Chinese mainland auto industry through its new Hangzhou factory. It capacity will be 240,000 units every year.
The first phase of construction will have an annual output of 120,000 vehicles and 200,000 engines in addition to an engineering center.
According to Li Junzhong, deputy manager of Yulon Group, the first model will be an SUV with a 2.0-liter turbo engine. Four new models are expected to be launched within one or two years.
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