Asian Auto Newsletter Sep 2005

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Asian Auto Newsletter Sep 2005 ASIA IS A BUSINESS IMPERATIVE… NOW MORE THAN EVER ASIAN AUTOMOTIVE NEWSLETTER Issue 45, December 2005 A quarterly newsletter of developments in the auto and auto components markets CONTENTS CHINA INTRODUCTION ................................................ 1 Bharat Forge and Chinese car manufacturer FAW CHINA ............................................................... 1 have announced a JV to manufacture automotive INDIA ................................................................ 4 components in China. Bharat Forge acquired a INDONESIA ...................................................... 5 52% stake in FAW's subsidiary FAW forgings for JAPAN .............................................................. 5 an undisclosed amount. The JV, Bharat Forge KOREA ............................................................. 6 FAW Corporation Ltd, will become operational from MALAYSIA ........................................................ 7 April 2006 and will be based at the FAW Forgings THAILAND ......................................................... 8 plant in Changchun, Northern China. The JV will VIETNAM .......................................................... 9 manufacture forged automotive components for commercial vehicles buses, trucks and passenger cars. December 12, 2005 The Bosch Group opened a new development and INTRODUCTION manufacturing facility in Wuxi. The Wuxi site covers some 300,000 square meters. Between 2005 and We hope you find the Asian Automotive Newsletter 2007, Bosch plans to invest a total of some € 650m informative. (US$770m) in China. In the past five years alone, the number of Bosch manufacturing facilities there BDA is a corporate finance advisory firm, which has doubled, from 10 to 20. November 17, 2005 assists multinational clients to identify, assess and execute cross-border transactions involving Asia, Continental AG aims to double sales at its including acquisitions, divestments, JVs and automotive systems division in Asia to € 1bn restructuring. We have offices and professional (US$1.2bn) by 2010, and it will likely build a staff throughout Asia, and in the US and Europe. greenfield tire plant in China. Continental had earlier sought to form a JV with China's Doublestar to If you think that BDA’s services may be useful to enter into the local tire market, but dropped that you, please contact us at any one of our offices or plan early in March after failing to gain majority email me at [email protected]. Contact control of the venture. Continental has also opened details for our offices are at the back of this a new regional headquarters in Shanghai, and is newsletter. We look forward to speaking with you building a technology centre in Yokohama, Japan, in the future. where 250 engineers will work. By the 2010, the Continental's automotive division intends to generate at least half of its new sales to non-European Charles Maynard automobile manufacturers. Presently, Continental Managing Director Automotive Systems generates € 500m (US$585m) Asian Automotive Newsletter Issue 45, December 2005 in sales annually in the Asian region. December 1, Hyundai Motor is planning to build a new 2005 US$560m engine plant in Rizhao, Shandong province, according to a news report. The new plant US engine producer Cummins has said that it will is expected to have an initial annual production invest US$300m in China over the next five years. capacity of 300,000 units, rising to 500,000 units. In business volume terms, Cummins aims to expand The new engine plant will supply Hyundai Group its Chinese operations from US$1bn in 2004 to JVs, Beijing Hyundai and Dongfeng Yueda Kia, US$3bn in 2010. China is now Cummins' largest in China. The two automakers have ambitious plans overseas market. The engine maker has teamed to raise production capacity in China to 1 million up with local heavy-duty truck-maker Dongfeng units by 2008. November 10, 2005 Motor on engine production. Its new investments includes a deal to produce 11-litre engines with Nanjing Automotive, which agreed to purchase Shaanxi Auto in Xian and natural gas engines and assets of MG Rover in July, has been holding talks exhaust systems with Dongfeng. October 17, 2005 on joint development of the UK car brand with First Auto Works (FAW). Nanjing Auto plans to set up Japanese mini-vehicle specialist Daihatsu has a subsidiary named Nanjing Auto MG agreed to license a unit of China's FAW Group to Automobile as part of its plans to revive Rover. produce a compact vehicle based on a multi- The company plans to build a manufacturing plant purpose vehicle (MPV) developed with Toyota. in Nanjing with annual output of 300,000 cars for Under the deal, FAW Jilin Automobile is to the venture. Since its takeover of MG Rover, Nanjing manufacture an MPV based on the Xenia from as has been in talks with rival Shanghai Auto and early as the first half of 2007. FAW Jilin will sell others to help share the development and the model under the Daihatsu brand name with initial manufacturing costs of the UK carmaker. SAIC annual output of 30,000 units. By licensing has rights and tooling for the cars but no production production of the Xenia to FAW Jilin, Daihatsu aims source for engines. Nanjing controls the engine to increase its brand recognition in China while production equipment, but its rights to both the achieving a more speedy entry into the Chinese engines and MG versions of the Rover cars are ill- market and saving on production and investment defined. November 8, 2005 costs. November 1, 2005 Nissan’s China JV, Dongfeng Motors, is to raise Chinese automaker Dongfeng is to reduce its its annual production capacity by 2007 by 80% to stake in local JV Dongfeng Yueda Kia by 5% to 270,000 units. The production capacity expansion 20%, according to news reports. The 5% stake at the Guangdong factory entails investment of will be transferred to Jiangsu Yueda which will around ¥9.5bn (US$80m). The expansion is raise its stakeholding from 25% to 30%. Kia will designed to sustain Dongfeng Motor's rapid growth retain a 50% stake in the JV. A final decision on in the China market. Nissan aims to sell 300,000 the move is expected by the JV's board next month. cars in China in 2007 with the release of two new The decision by Dongfeng follows a request by models planned every year from 2006. November Jiangsu Yueda for it to pull out of the JV completely 9, 2005 over what it described as 'an unreasonable parallel equity structure and lots of disputes'. The JV posted Czech carmaker Skoda has signed a partnership a RMB35m (US$4.3m) net loss over the first eight with Shanghai Auto. Under the deal Skoda has months compared with an over RMB100m already signed a partnership agreement to (US$12.4m) net profit over the prior-year period. manufacture its Octavia model at local JV The loss was attributed to higher costs and a price Shanghai VW in 2007. Initial annual Skoda war. November 18, 2005 production is being targeted at 40,000 vehicles, potentially rising to 60,000. Shanghai Auto, meanwhile, further plans to launch its own brand 2 Asian Automotive Newsletter Issue 45, December 2005 models in 2006 using technology acquired from UK engines with an annual production capacity of carmaker MG Rover. The new model, based on 75,000 units. Production capacity is to be doubled the Rover 75, is to be shown for the first time at the in the plant's next phase. The engine is to be fitted Beijing Auto Show in mid-2006. December 9, 2005 in the Suzuki Wagon R Wide currently being produced by Changhe Suzuki as well as other Siemens is to construct a gasoline engine testing models. September 22, 2005 centre in Changchun City. Siemens already operates a manufacturing facility in Changchun Toyoda Machine Works, Yamasei Kogyo and which provides support services for 60% of Yokomaha Rubber have established a company automakers in China and yields annual sales of called Yamasei Automotive (Foshan) to produce around RMB740m (US$92m). The new testing automotive parts, including power steering piping, centre will help Siemens lower its costs as engine in China. Initially, the new company plans to control management systems are currently shipped manufacture and ship power steering pipes to to Germany for testing. November 22, 2005 Toyoda-Koki Automotive (Fushan) Co Ltd, a subsidiary of Toyota Machine Works. The new Suzuki is planning to build a new factory with its company will also begin supplying automotive parts Chinese partner, Changan. Changan and Suzuki to Japanese automotive manufacturers in China in are seeking to expand their production capacity in April 2006. November 21, 2005 order to meet rising demand for compact cars in China. The two companies currently produce the Trelleborg Group has signed an agreement to Suzuki Alto. The new 200,000-unit capacity plant acquire the remaining 45% of shares in its Chinese will entail new investment of US$370m. Changan subsidiary, Wuxi Trelleborg Vibration Isolator also plans to build two of its own-designed cars in Co Ltd from Wuxi Guolian Group. Trelleborg a move towards independent car production. Wuxi, the name of the new company, focuses September 28, 2005 primarily on vehicle components, such as antivibration systems, selling to both domestic and Suzuki said that it will raise its production capacity international customers. The plant, which was at a JV in China by 60% to 160,000 units. Suzuki inaugurated in the spring of 2005, replaced said that under its expansion plans at Jiangxi Trelleborg's former plant in Wuxi, doubling Changhe, it will acquire local car assembler Jiujian production capacity. The total area of the new plant Changhe Automobile, an affiliate of Suzuki's JV is almost 20,000 square meters. October 31, 2005 partner, Changhe Aircraft Industry. The company will produce the Suzuki Aerio (Liana) in China and Yokohama Rubber and Shandong Yuema provide additional annual production capacity of Rubber Belt, a Chinese conveyor-belt 100,000 units.
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