perspectives on the evolution of the automobile … · the cars sales ratio that are the indicators...

PERSPECTIVES ON THE EVOLUTION OF THE AUTOMOBILE INDUSTRY IN CHINA

AND IT’S IMPACT ON THE LOGISTIC FLOWS IN EUROPE

April 2009

Automotive Industry in China

Port of Barcelona Chair of Logistics 2

Table of contents

I Executive Summary and methodology ....................................................................... 4

1. Macro analysis ...................................................................................................... 4

2. Micro analysis ....................................................................................................... 5

3. Conclusion ............................................................................................................ 5

4. Methodology ......................................................................................................... 6

5. Note ....................................................................................................................... 6

II Macro analysis ............................................................................................................ 7

1. History of the Automotive Industry in China ....................................................... 7

2. Current market situation ....................................................................................... 8

2.1 Capacity ....................................................................................................... 11

2.2 Production and Sales (domestic markets) .................................................... 12

2.3 Exports: figures and current markets ........................................................... 16

2.4 Imports: figures and current markets ........................................................... 20

3. Legal environment and market requirements ..................................................... 22

3.1 Legal environment in Europe and independent assesment .......................... 23

a) The United Nation Economic Commission for Europe (UN ECE)

regulations ................................................................................................. 24

b) European Community Whole Vehicle Type Approval (EWVTA) 24

c) EuroNcap ....................................................................................... 25

3.2 Legal environment in U.S. ........................................................................... 26

3.3 Challenges faced by the Chinese car makers that want to enter developed

markets 27

III Micro analysis ........................................................................................................... 28

1. Overview of Automotive Industry in China and future perspectives ................. 28

1.1 SWOT analysis of the main group players in the market ............................ 33

1.2 Plans for expansion of car makers ............................................................... 34

a) Chery and Geely ............................................................................ 34

b) New Technology cars .................................................................... 36

1.3 Perspectives of consolidation in the industry ............................................... 36

a) Government plans to enhance the industry .................................... 36

b) Future mergers and acquisitions .................................................... 37

2. Decision making process along the logistic chain .............................................. 39



IV Scenarios and conclusions ........................................................................................ 42

1. Scenarios: development routes ........................................................................... 42

1.1 Drivers .......................................................................................................... 42

1.2 Tendencies ................................................................................................... 43

a) Big 3 (or Big 5) .............................................................................. 43

b) JV’s ................................................................................................ 43

c) New Players ................................................................................... 44

2. Conclusions ......................................................................................................... 45

V Annexes ..................................................................................................................... 47

Annex I. Relations established between foreign and local car manufacturers ........... 48

Annex II. Car manufacturers in China ......................................................................... 50

Annex III. Car models produced in China ..................................................................... 51

Annex IV. Summary of some relevant companies ........................................................ 55

Annex V. Export and import data of Passenger Cars ................................................... 61

Annex VI. Volume of imported passenger cars by origin, brand and model ................ 66

Annex VII. Volume of top 30 imported passenger cars models in top 5 provinces 69

Annex VIII. Comparison of data from different sources of information .................. 71

Annex IX. Overview of the main RoRo terminals in China .......................................... 72

Annex X. Homologation in EC (EWVTA) (list of Applicable directives) .................. 73

Annex XI. Overview of the situation of the production centers .................................... 76



I Executive Summary and methodology

1. Macro analysis

The automotive industry in China was mainly developed in the past 20 to 30 years.

In 2001 the sales of automobiles in China have experienced an incredible growth

mainly driven by the growth of sales of passenger cars. In 1998 China was producing

less than 2 million vehicles while 10 years later the production has reached 9 million

units.

China is among the three world largest car producers together with the U.S. and Japan.

China is not as affected by the recession as other countries. Therefore, during the first

three months of 2009, more cars have been sold in China than in the U.S. or Japan.

China domestic sales are expected to reach 10.7 million cars in 2009.

However, the automotive industry in China is not mature. The car parking ratio and

the cars sales ratio that are the indicators used to measure the maturity of the industry,

are far lower than those of the U.S., Europe or Japan. Furthermore, the after sales

services and other services like financing, service centers and used car market are still

not developed. The industry potential is incomparable; in the U.S. there are 90 cars

per every 100 people able to drive, however, in China there are only 3.

According to the IMF (International Monetary Fund) the number of automobiles in

the world (that was 600 million in 2005) will be 2,950 millions in 2050. In 2030 there

will be more cars in China than in the U.S. and in 2050 there will be as many cars in

China as there are today in the world.

Exports, although they are still very small, have been increasing. We do not have

reliable data to know the exact ratio of exports on production because the data for

exports are not reliable. However, for sure it is less than 10% (we estimate exports to

be around 4% in 2007). The major regions are Europe and North America that have

70% of the exports. The exports of passenger cars to Spain have been growing,

although the total quantity according the information from customs was around

38,000 units in 2007. However, our research leads us to think that in reality this

number must be much smaller.

China imported around 530,000 passenger cars in 2008 mainly from Japan, Germany,

South Korea and the U.S.

China made cars, in order to be able to be sold in Europe, need to pass the

homologation process. Apart from this Approval by the European Community, that is

mandatory, if they do not get a minimum punctuation in the EuroNCAP the market

will reject them (the EuroNCAP is an organization that provides an independent

assessment of the safety performance of some of the most popular cars sold in

Europe).



2. Micro analysis

There are around 100 car manufacturers in China that can be divided in three groups

of players: the Big 3, the Joint Ventures (JV’s) and the New Players.

The Big 3 are the three largest Chinese companies that are supported by the

government. These are SAIC, FAW and DFM.

The Joint Ventures are among big Chinese companies and MNC’s. The

MNC’s are not allowed to produce cars in China if it is not in JV with a

Chinese company. The MNC cannot have more than 50% of equity and can

only establish JV’s with a maximum of two Chinese companies. The biggest

ones are GM-SAIC, VW-SAIC and VW-FAW.

The New Players are younger and independent companies. The best known

are Chery, Geely, BYD, Great Wall, Brilliance and Lifan.

The main objective of the car manufacturers in China is wining market share in the

domestic market. China is the most attractive market for automobiles especially for

passenger cars. However, among the three groups of players the ones that are making

bigger efforts to export abroad are the New Players.

The Big 3 and the New Players are already exporting to developing countries. The

JV’s state that they will not export from China because that will damage their

European or U.S. business. However, we have found some cases where some of the

JV’s are already exporting.

The automotive industry in China will go through a process of mergers & acquisitions.

The objective of the government is to have 5 big companies whose production

capacity can be over 2 million units per year (and can therefore compete with the

traditional world leaders) and several smaller auto groups that can produce 1 million

units per year. SAIC, DFM and FAW are expected to be among the 5 big ones. Chery

together with JAC and CAMC, BAW, GAIC and Southeast could also be appointed

by the government.

Last but not least, China aims to be the world leader in new technology vehicles using

more environmentally friendly energy. In 2008, China produced 2,000 units of

electric and hybrid cars. This production is expected to increase up to one million

vehicles in 2011.

3. Conclusion

There is no doubt that China will be part of the globalised automobile industry.

Chinese cars will be sold all over the world. They are already exporting cars in

developing countries. The only question is how long it will take to enter Europe and

the U.S.

To conclude this report the expected scenarios for the Big 3, the JV’s and the New

Players have been analyzed and some recommendations have been drawn.



4. Methodology

Our main objective is to gather information about and analyze the situation of the

passenger cars market. However, we will also overview the situation of the

automobile in general.

The first phase has consisted on gathering information from secondary research about

macroeconomic data. Our main sources of information have been:

China Development Review (CDR)

China Association of Automobile Manufacturers (CAAM)

Fourin: Research and Analysis of the Asian Automotive Industry

CEIC database

InterChina Analysis

China Commerce Yearbooks

China Main Customs Administration.

In China, it is not easy to have access to reliable sources of information. The

databases and national statistics sometimes are far away from the reality. Often we

may get the same information from different sources and it is difficult to know which

source is more reliable. Knowing this, we have compared the information provided by

several sources to see how big could be the deviation. In some cases, we have found

that the differences from one source to another can be enormous. In Annex VI there is

a comparison of the same data from different sources of information.

In a second phase, we have undertaken several interviews to car manufacturers,

industry specialists, shipping companies and terminal operators.

Through the interviews we have contrasted the information from the secondary

research and we have got inputs from the different players in this industry about the

current situation and the perspectives for the future.

5. Note

We want to highlight that in this report the Annexes play a very important role. In

order to understand the scenarios and recommendations of this report, it is important

to be aware of the complexity of the Automotive Industry in China. There are

between 80 to 120 licensed car manufacturers in China (we have not been able to find

out the exact number). The past history of China has played an important role on this.

Chinese provinces have a high level of autonomy and the size of many European

countries. Consequently each one of these provinces have seen the naissance of at

least one car manufacturer and the provincial or local government has protected one

or several car manufacturers.



II Macro analysis

1. History of the Automotive Industry in China

Eventhought the Automotive industry in China was mainly developed in the past 20

to 30 years, China tried to manufacture cars since the beginning of the 20th

century.

However, China really began to manufacture cars as early as 1949 with the help of

the Soviet Union. The cars’ platforms however were not developed in China, they

made use of Soviet Union technology.

It wasn’t until 1956, that China manufactured its first car under the name of Jiefang.

This first car was manufactured by the FAW group (China First Auto Group

Corporation) which two years later, in 1958, produced one new model of passenger

car first called “Dongfeng” and later renamed to “Hongqi”.

In the following years China localized its car manufacturing capacity in four locations:

Beijing, Shanghai, Nanjing and Jinan. During this period the car manufacturing

industry remained quite small, despite of that in 1969 the SAW group was founded in

Hubei Province (China Second Auto Group Corporation). Later, in 1992 this

company changed the name to Dongfeng Motor Corporation (DFM).

The starting of the modern auto industry in China could be set as the establishment of

the first automotive joint venture in 1984 between BAW (Beijing Automobile Works)

and AMC (American Motor Corp.): Beijing Geep

During the 25 years prior to this Joint Venture the total production volume was only

5000 units of passenger cars.

One year later in 1985 many Joint Ventures were established: Shanghai-VW, NAC

(Nanjing Automobile Group Corporation) introduced the Iveco from Fiat and GAC

(Guangzhou Automobile industry Group Corporation) and Peugeot

Given the quick development of the car industry, the Chinese government decided to

support its development as the major pillar of its economic reform. Since then,

Chinese automotive industry has been developing fast. In the beginning it used

technology from the foreign joint venture partners and later started to develop its own

technology and platforms.

The following important milestone in Chinese automobile industry is the foundation

of SAIC in 1990 (Shanghai Automobile Industry Corporation). During the nineties

the industry experienced a considerable growth and reached 1.6 million units in 1998.

During this decade new car models entered the Chinese market such as the family car

model or the mid/high luxury passenger cars introduced by SGM and Guangzhou

Honda.

However the biggest growth of the industry has been experienced during the last

decade, where the industry has consistently seen double digit growth. In 2002, total

year sales were 3,2 million and the industry started to see its first consolidations (the

merger between FAW and TJAM (Tianjing Automobile Industry Group)).



Currently, China has a fuel-efficiency standard (approved in 2005), and Chinese car

makers begin to develop its own hybrid and electric vehicles.

2. Current market situation

During the last decade the automotive industry in China has experienced an incredible

growth. Sales of passenger cars in China exploded after 2001.

Figure 1. Figure Automobile production in China. Source: CDR database. Original data from

China Automobile industry Association and CDR database news.

This growth was driven by a nascent middle class of 100 million people with an

average income of US $4,000, expanding access to credit, and price cuts.

Sales volume of Passenger Cars in China (1997-2007)

0

1

2

3

4

5

6

7

8

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Mil

lio

ns

Year

Figure 2. Sources: China Automotive Industry Yearbook and InterChina Analysis.1

1 Note: 2008 estimation is based on 10% growth over 2007.

Automobile production in China

0

1

2

3

4

5

6

7

8

9

10

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Mil

lio

ns

Year



In 2006 the Chinese market overtook Japan to become the world's second largest

market for new vehicles in 2006 next to only the United States2, registering sales of

7.22 million units3. However, in 2007, U.S. sales went down considerably and Japan

become the number 1 (See Figure 3). In the first month of 2008 China has been the

worldwide leader of car production.

Top10 Production of automobile and passenger cars in 2007

0

2

4

6

8

10

12

14

Japa

n

Am

erica

China

Ger

man

Kor

ea

Fren

ch

Bra

zil

Spa

in

Can

ada

India

Mil

lio

ns

Automobile

PassengerCar

Figure 3.Top10 automobile producers in 2007. Source: CDR database.4

While in 2003 China was the fifth biggest automobile producer, in 2007 it conquered

the third position only after Japan and the U.S. The world production in 2007 was

over 70 million vehicles.

However passenger car ownership in China is still very low with a ratio of 17 cars per

1000 people. We can definitely say that the automotive industry in China is not

mature.

2007Car Parking

(thousands)

Car Sales

(thousands)

Population

(thousands)

Car Parking ratio

(per 100 people)

Car Sales ratio

(per 100 people)

EU 15 195,622 14,105 386,455 51 3.65

USA 135,670 7,561 301,585 45 2.51

Japan 55,213 4,399 127,274 43 3.46

China 28,940 4,942 1,321,290 2 0.37

Figure 4. China Automotive Industry maturity. Source: Global Insight Database, Jan 2009

updated.

2 “Study on the Future Opportunities and Challenges of EU-China Trade and Investment Relations”.

Emerging Markets Group and Development Solutions

3 China Association of Automobile Manufacturers (CAAM) Jan.11 2007

4 U.S. used to be the biggest automobile production country, but in 2007, Japan overtook American to

reach the top 1.



Some hints about the automotive market in China

Worldwide, the business of car companies has three business lines:

New car sales

After sales (including spare parts sales)

Services (financing, service center and used cars)

In developed countries:

Around 10-20% of profits come from sales

Around 50% of profits come from after sales

Around 30-40% of profits come from services

However the average in China is the following:

80% of profits come from sales

20 % of profits come from after sales

0% of profits come from services

In China, in the auto assembly sector, foreign companies cannot have more than a

50% equity share. Consequently, the Chinese industry is composed of local

manufacturers and Joint Ventures of foreign and local companies5. Some sources say

that there are around 120 car manufacturing companies in China while others say that

there are 100 to 80. (See Annex 2 for list of companies in China). Although we do not

have the exact number, the reality is that there are far more companies than the

industry can support.

The relationship between foreign and local companies is said to be quite complicated.

Indeed, each local company can have several foreign partners and each foreign

company can have several local partners6. Furthermore, local companies can also

produce alone. Consequently, the local companies which are far behind in knowledge

than their foreign partners, are in a continuous process of learning and transferring

knowledge from the JV to the local company (refer to Annex 1 for a better

understanding of these Joint Ventures).

Most of the Joint Ventures produce the cars which development cost is already

amortized in Europe or United States. However, often some minor changes are

introduced to adapt the cars to the Chinese market. Few models are fully developed

for the Chinese market (See Annex 3 to see the car models that are being produced in

China).

5 Chinese law forces foreign car makers to have a local partner and consequently, the success of a

foreign company in the Chinese auto sector has a great deal to do with the JV structure.

6 Up to now, foreign auto makers are not allowed to cooperate with more than two Chinese auto

makers.



According to the results from CAAM7, the top 10 popular passenger cars in 2008 are:

Jetta(FAW-VW), Santana(SVW), Buick Excelle(SGM), Corolla(FAW Toyota),

Accord(Guangzhou Hongda), Camry(Guangzhou Toyota), F3(BYD), QQ (Chery),

Xiali(Tianjin FAW) and Elantra(Beijing Hyundai).

2.1 Capacity

Despite this rapid growth, enormous investment in capacity over the last five years

has led to intense price cutting and a consequent fall in profits. The total net earnings

of the top 30 auto producers in China increased from 2003 to 2004 by 45.2% but

profits in the industry fell by 6% during this period. European producers in particular

have suffered from the rapid increase in competition8.

There has been no country level planning and each province has supported its local

producers, leading to an overall overcapacity.

China's vehicles: manufacturing capacity

0

2

4

6

8

10

12

14

16

18

20

2005 2006 2007

Year

(Milli

on

Ve

hic

les

)

Capacity

Production

Figure 5. Capacity compared to production in China. Source: Fourin web page (www.fourin.com)

7 China Association of Automobile Manufacturers

8 “Study on the Future Opportunities and Challenges of EU-China Trade and Investment Relations”.

Emerging Markets Group and Development Solutions

http://www.fourin.com/



Manufacturer Present Capacity (Unit)

Capacity Under

Construction(Unit)

(Year of

completion)

Beijing Hyundai 300,000 150,000 2010

FAW-VW 400,000 600,000 2010

FAW Group 100,000 300,000 2010

Huachen Zhonghua 100,000 400,000 2010

Huachen BMW 30,000 400,000 2010

FAW Xiali 250,000 / /

FAW Toyota 300,000 200,000 2010

Dongfeng Yueda Kia 130,000 300,000 2010

Nanya Auto (Fiat) 60,000 250,000 2010

Chang’an Ford Mazda 160,000 / /

Shanghai-VW 450,000 100,000 2009

Shanghai GM 600,000 400,000 2010

Chery 200,000 600,000 2008

Geely 300,000 1,000,000 2010

DPCA 300,000 450,000 2010

Dongfeng Honda 120,000 180,000 2010

Chang’an Suzuki 200,000 200,000 2008

Chang’an Ford 250,000 100,000 2009

Guangzhou Honda 240,000 60,000 2010

Guangzhou Toyota 100,000 200,000 2010

Dongfeng Nissan 150,000 750,000 2010

FAW Mazda 150,000 / /

Figure 6. Major car OEMs are building up further capacity. Source: Inter China management

consultants.

According to InterChina consultants, China will reach a capacity of 15 million unit

cars by 2010. This information is not consistent with the information in Figure 5 that

states that China in 2007 already reached a capacity of 15 millions.

2.2 Production and Sales (domestic markets)

Annual passenger car production in China

0

200

400

600

800

1,000

1,200

1,400

1,600

1990 1994 1998 2002 2006

Th

ou

sa

nd

s

Ou

tpu

t (u

nit

s)

Passenger car

Large type

Medium type

Light type

Miniature type

Figure 7. Source: China Automotive Industry Association



The definition for Passenger Cars was changed in 2005 by the CAAM. Consequently,

we cannot mix data before and after 20059.

In the following graph, we can find the monthly information of production. There is a

big difference between the annual output, if we use the information of China

Automotive Industry Association, and the CEIC database. The reason might be the

definition of passenger cars. Although we think the information from the China

Automobile Industry Association is more accurate, we need to use the information

from CEIC to show how the current global crisis has affected the market in the recent

months.

China Passenger Car production

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Jan

Feb

Mar

AprM

ayJu

n Jul

AugSe

pOct

NovDec

Pro

du

ctio

n (

un

its)

2005

2006

2007

2008

Figure 8. Source: CEIC Database

9

From January 2005, a new auto statistics reporting system was implemented by the China

Automotive Industry Association. The “Passenger car" category was renamed as “passenger vehicles”,

with broader coverage, including: 1. passenger cars; 2.MPV; 3.SUV; 4.other passenger vehicles

(vehicles in this category were previously included in Mini Bus or Light Bus category). In the old

system only data of some SUV and MPV brands were included in the passenger car category and

others were included in mini or light buses statistics. (Interchina)



China Passenger Car Sales

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Jan

Feb

Mar

AprM

ayJu

n Jul

AugSe

pOct

NovDec

Sale

s (

un

its) 2005

2006

2007

2008

Figure 9. Source: CEIC Database

In Figure 8 and Figure 9, we observe that the crisis has also affected China. In August

2008, the carmakers did not increase the production compared to the same month in

2007. However, the sales were even lower than in 2007. Recently, in October the

market has recovered a little bit.

Once more we put in evidence that the official sources of information in China might

not be very reliable. We have had access to the data adjusted by SAIC market

research department. As we can see in Figure 10 the sales data for each month are

lower than the ones from CEIC database. The sales data from SAIC in Figure 10 are

likely to be more realistic. As we do not have the data for 2008, we have used the data

from CEIC to see the effect of the worldwide crisis on sales.

Comparison among official data and data adjusted by car

company

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Jan

Feb

Mar

chApr

ilM

ay

June Ju

lyAug Sep O

ctNov

Dec

(Un

its

)

2005 adj.

2006 adj.

2007 adj.

2005

2006

2007

Figure 10. Sales volume of Passenger Cars in China. Source: Data adjusted by SAIC market

research department from official sources.



Annual Sales volume and forecasting (Units)

4.05.1

6.3 6.7 7.18.2

9.410.5

12.113.8

15.8

0

2

4

6

8

10

12

14

16

18

2005 2006 2007 2008 2009* 2010* 2011* 2012* 2013* 2014* 2015*

Mil

lio

ns

Figure 11. Annual sales volume and forecast. Source: 2005-2008 data come from CEIC database

and the forecasting are from Inter China Analysis (2007)

Export proportion of produced passenger cars

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2005 2006 2007 2008

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Production (Units)Percentage of Export in Production

Figure 12. Percentage of Export in Production. Source: Own elaboration from data from CEIC

database.10

As we can see the data for 2005 to 2007 in Figure 12 and Figure 13 are different.

However the order of magnitude is similar (if we had used the data for exports from

customs the percentage of export in production would be much higher). This is one

more reason to think that the data for exports from customs is much higher than the

reality.

10

To elaborate this graph we used conservative data for exports. As we will explain later, the data of

exports from customs seem to be much higher than the reality.



Figure 13. Percentage of Export in Production. Source: InterChina.

2.3 Exports: figures and current markets

It has not been possible to know which figures are more accurate regarding the

exports. The logic reasoning says that the information from customs should be a

reliable one. However the reality is that the numbers from customs are much bigger

than the numbers from any other sources.

Customs (8703) Fourin(CAAM) CEIC（CAAM） Automarket

2007 1,617,350 246,025 257,519 264,501

2006 1,433,051 119,394 115,467 126,344

2005 963,852 42,881 38,785 47,185

Passenger

Car

Database

Figure 14. Comparative of export data from different sources of information.

In Annex VI, we can see in more detail the gap between different sources.

In Annex V we have the data for exports from China Customs.

It is possible that the definition of Passenger cars for customs include some kind of

vehicles like buggies that the other databases do not include. However, even if this is

the case, this cannot justify such a big difference between the data from customs and

the other sources.

Nevertheless, we have used the data from customs, that are the most detailed and

complete ones we have, to study the exports of Passenger cars by regions and by

countries. In 2008 the exports to U.S. decreased considerably as we can see in Figure

16. Figure 15 shows that now Europe is the main region for exported cars from China.



Passenger Cars China exports to major regions 2008

(Units)

44%

26%

12%

9%

6% 3%

Europe *

North America

South America

Asia *

Africa

Oceania

Figure 15. Passenger Cars China exports to major regions in 2008: Europe, North America,

South America, Asia, Africa, and Oceania. Source: China Custom. * Asia and Europe data do

not correspond to the ones in the database but they have been adjusted to include Turkey in

Europe.

Passenger Cars China major exports to main countries(Units)

0

20,000

40,000

60,000

80,000

100,000

U.S

.

Hol

land

Rus

sia

Ger

man

y

Ukr

aine

Can

ada

UK

Argen

tina

Italy +

San

Mar

ino

Polan

d

Uni

ted

Arab

Em

irate

s

Chi

le

Egypt

Japa

n

Franc

e

Alger

ia

Mex

ico

Belgium

Venez

uela

Spain

Syria

Swed

en

Col

ombia

Den

mark

Finla

nd

Turke

y

Brazil

Iran

(Un

its)

2008 2007

591,523

236,145

Figure 16. China Passenger car exports by country (top range by 2008). Source: China

customs.11

Belgium, Germany, Check Republic and the three Baltic Countries are the only

countries in the European Union that allow cars that have not pass the European

homologation to be driven. Brilliance has been selling cars in those countries for

some years. However, these cars are being “attacked” by ADAC, the German

association similar to RACC in Catalonia12

because they claim that the cars are not

safe.

11

Use this graph only to compare the exports among countries. The absolute numbers might not be

reliable.

12 www.youtube.com/watch (New Chinese Car Crash Test Disaster-2007 Brilliance B56)

http://www.youtube.com/watch



1,617

305

1,432

221

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Th

ou

sa

nd

Un

its

2007 2006

Passenger cars

China Exports China Imports

Figure 17. Source: China Commerce Yearbook 2008.

0

50

100

150

200

250

300

Th

ou

sa

nd

Un

its

2007 2006

Trucks


0

10

20

30

40

50

Th

ou

sa

nd

Un

its

2007 2006

Buses


Figure 18. Source: China Commerce Yearbook 2008.

China's passenger cars exports to Europe

0

100

200

300

400

500

600

700

20022003

20042005

20062007

Th

ou

san

ds

Qu

an

tity

(U

nit

s)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Valu

e (

1000 U

SD

)

Quantity(Unit)

Value(USD)

Figure 19. Source: China Main Customs Administration.13

According to data from customs, Spain accounts for 5% and 2% of the passenger cars

exports in 2005 and 2007 respectively. In 2008 the percentage has decreased to 1%.

13

Use this graph only to see the tendencies. The absolute numbers might not be reliable.



China's automobile exports to Spain (USD)

0

50,000

100,000

150,000

200,000

250,000

300,000

2002 2003 2004 2005 2006 2007 2008

Th

ou

san

ds

Valu

e(US

D)

Figure 20. Value of China’s automobile exports to Spain. Source: China automotive industry

yearbook (Chinese version).14

China's passenger cars exports to Spain

0

10,000

20,000

30,000

40,000

50,000

60,000

2002 2003 2004 2005 2006 2007

Qu

an

tity

(U

nit

s)

0

10,000

20,000

30,000

40,000

50,000

60,000

Valu

e (

10

00 U

SD

)Quantity(Unit)

Value(USD)

Figure 21. Source: China Main Customs Administration.15

14

In the English version the numbers are one order of magnitude smaller. Data for 2006 are not

available.

15 Use this graph only to see the tendencies. The absolute numbers might not be reliable.



2.4 Imports: figures and current markets

The imports to China have been growing. Half of the imported cars come from Asia,

almost all of them from Japan and South Korea. The imports from Europe represent

33% and come mainly from Germany. In Annex V we can find the imports data from

customs. We think that the data for imports is reliable.

China Imports (worldwide)

0

50,000

100,000

150,000

200,000

250,000

2003 2004 2005 2006 2007 2008

(Un

its)

Figure 22. Passenger Cars China imports since 2003 (worldwide). Source: China custom.

Passenger cars China imports from major regions 2008

(Units)

54%

33%

12%1%

Asia *

Europe *

North America

South America

Figure 23. Passenger Cars China imports from major regions in 2008: Asia, Europe, North

America, South America. Source: China Custom. * Asia and Europe data do not correspond to

the ones in the database but they have been updated to include Turkey in Europe.



Passenger cars China major imports from main countries (Units)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Japan

Germ

any

South K

orea

U.S.

U.K.

Slova

kia

Sweden

Austria

Mexico

Mala

ysia

Belgiu

m

France

Canada

HungaryIta

ly

Spain

Finland

Portugal

Turkey

Poland

(Un

its)

2008 2007

158, 674

106, 717

Figure 24. China Passenger car imports by country (top range by 2008). Source: China custom.

See Annex VI and VII for more detailed information about imported cars, by origin

brand and model in Annex VI and by the main places in China were these cars are

being imported.

The imports from Spain to China, although they have increased around 100% are very

low. In 2007 they were around 500 units and 2008 were around 1000 units.

Import from Spain to China

0

200400

600

800

10001200

1400

2003 2004 2005 2006 2007 2008

(Units)

Passenger Car

Automobile

Figure 25. Source: China custom, organized by CDR.



3. Legal environment and market requirements

Before being able to sell a motor vehicle in a market, it needs to have a Type

certificate according to the standards of the country where it will be sold. Different

countries give different certificates. In order to get those certificates you have to go

through what is called the homologation process.

There are many different homologation processes: U.S. has the self-certification

according to the Federal Motor Vehicle Safety Standards issued by the National

Highway Traffic Safety Administration. In Europe the national laws coexist with the

two European systems of homologation: the European Union directives and the

United Nations Economic Commission for Europe regulations.

Apart from these homologations, there are independent organisms that go further than

the legislation and give advice about the safety performance of cars. These organisms

are for example in Europe de EuroNCAP and in China the ChinaNCAP. There have

been cases where the car manufacturers have decided to stop selling one car model

that passed the homologation process but had a low punctuation in the EuroNCAP,

and therefore damaged the manufacturer’s brand.

In this chapter we are going to analyze:

The European Union directives (The European Whole Vehicle Type Approval

(EWVTA)).

The United Nation Economic Commission for Europe (UN ECE) regulations.

The NHTSA (National Highway Traffic Safety Administration) self-

certification in U.S.

The EuroNCAP.



3.1 Legal environment in Europe and independent assesment

In Europe, each country has its national laws to authorize the sale and circulation of a

car. However, European countries have also the European systems for homologation

of motor vehicles.

In Europe, two parallel systems for homologation of motor vehicles exist:

The European Union directives (The European Whole Vehicle Type Approval

(EWVTA16

)).

The EWVTA allows cars to be driven in all member states and it is progressively

replacing the individual national type approvals of the EU member states. In fact, the

National Type-Approvals are expected to disappear in 2010.

The United Nation Economic Commission for Europe (UN ECE) regulations.

According if the homologation is gotten through the EU directives or through the UN

regulations the motor vehicle will get one certificate or another:

Homologation through the U.N. regulations

Homologation according to the European directives

x: the country that gives the homologation (ex: Spain 9, Holland 4, etc.)

16

Type-Approval certificate is the document whereby the Approval Authority officially certifies that a

type of Vehicle is approved. With the test report and the Technical Documentation, the Approval

Authority issues the type Approval Certificate.

Technical Documentation: document set out in every separate Directive that prescribes the information

to be supplied by an applicant.

Directive: law enforced by the EC stating requirements and specifications to be met by all type-

approved vehicles.

Test report: document issued by the technical service describing tests carried out and test result

obtained.

Technical Service: organization appointed by the Approval Authority of a Member State as a testing

laboratory to carry out tests or as a conformity assessment body to carry out the initial assessment and

other tests or inspections on behalf of the Approval Authority.

Ex

ex



a) The United Nation Economic Commission for Europe (UN

ECE) regulations

UN ECE is an organizational part of the United Nations.17

Members are EU member

states plus many other countries such as Japan, U.S., Canada, Israel, South Africa,

Russia, Belarus and Turkey. In total there are 56 member States. Thus, testing

according to ECE regulations opens the gate to the worldwide markets and it is easier

to meet because of a broader acceptance of approved components.

b) European Community Whole Vehicle Type Approval

(EWVTA)18

The European Community Whole Vehicle Type-Approval (EWVTA) system applies

to passenger cars since January 199819

. As a result, this category of vehicles (called

M120

) must comply with all the relevant European Community (EC) type-approval

directives in order to be sold in the market. In Annex X we can find the List of

Applicable Directives to get the Type Approval.

EWVTA System allows manufacturers to have a vehicle "type" approved in one

Member State and then be able to market the vehicle in all other Member States

without further tests.

Once the Type approval is granted, the approval authority of each Member State must

also send to the approval authority of the other Member States a copy of the vehicle

type-approval certificate for each vehicle type which it has approved, refused to

approve or withdrawn.

In the Figure below we can see which are the steps to get the homologation for

Europe through the EU directives:

17

The UN ECE secretariat headquarters is in Geneva, Switzerland.

18 “LegalRequirements. EU vs USA Homologation” Idiada information.

19 Some sources say this law applies on mandatory bases since 1998. In other hand we have the

information that cars that don’t have any European homologation can be driven in Germany, Belgium,

Check, Republic, Latvian, Lithuania and Estonia. It could be possible that these cars are not

accomplishing the European legislation.

20 Vehicles used for the carriage of passengers which have no more than eight seats, in addition to the

driver’s seat. This includes both, small minibuses and regular passenger cars.

http://en.wikipedia.org/wiki/Geneva

http://en.wikipedia.org/wiki/Switzerland



Figure 26. Homologation process in E.U. Source: IDIADA information.

When a vehicle obtains the EWVTA, each Member State shall register; allow the sale

and the entry into service of new vehicles conforming to that EWVTA. Each vehicle

must have a valid Certificate Of Conformity (COC). The COC is a statement by the

manufacturer that the vehicle conforms to the relevant EC type-approval. Member

States cannot refuse to register vehicles for use on their roads if they comply with a

properly issued type-approval.

c) EuroNcap

EuroNCAP is an organization that provides an independent assessment of the safety

performance of some of the most popular cars sold in Europe. EuroNcap was

established in 1997. Currently it is backed by seven European Governments21

, the

European Commission and motoring and consumer organizations in every EU

country.

Euro NCAP is working as a catalyst for encouraging significant safety improvements

to new car design.22

21

UK, France, Germany, Sweden, Netherlands and Spain.

22 http://www.euroncap.com



3.2 Legal environment in U.S. 23

U.S. Federal law prohibits any manufacturer to introduce into interstate commerce,

selling or importing any new motor vehicle unless the vehicle conforms to all

applicable safety standards.

NHTSA (National Highway Traffic Safety Administration) is authorized to issue

Federal Motor Vehicle Safety Standards (FMVSSs) that specify performance

requirements for new motor vehicles and items of motor vehicle equipment.

Manufacturers are required by statute to self-certify that their products conform to

NHTSA's safety standards before they can be offered for sale.

Evidence of that certification must be displayed in the form of a label on the vehicle.

Label's size, location and text are specified by NHTSA.

Manufacturers must also submit identifying information to NHTSA. In other words

NHTSA does not approve motor vehicles.

Figure 27. Homologation process in U.S. Source: IDIADA information.

23

“LegalRequirements. EU vs USA Homologation”. Information. from Idiada



3.3 Challenges faced by the Chinese car makers that want to enter developed markets

Countries that have no resources to develop their own laws can use the European

Nations list of regulations to decide their standard and which cars can be sold in their

country.

Through interviews, we have found out that in China, the certification companies

recommend to Chinese car makers that want to sell in Europe, to go through the UN

list of regulations as it’s easier to meet. In this way, if finally the automakers cannot

get the homologation, the tests done can be easily used to find out in which countries

the car could be sold. Some developing countries only require 20 or 30 tests to be

passed in order to get the homologation. This is one of the main reasons why Chinese

cars are being first exported to developing countries.

In our research we have found out that the main problems that Chinese car

manufacturers are facing when trying to pass the U.S. homologation are the safety

regulations. However, when they try to pass the European regulations the more

restrictive regulations are the gas emissions and the ones related to the recyclability of

the materials. Regarding the last one, in Europe the use of asbestos, lead and Cr+6 is

forbidden. However, in China the use of these materials, that are cheaper than their

substitutes is still widely extend and consequently difficult to find suppliers of car

components that do not use them.



III Micro analysis

1. Overview of Automotive Industry in China and future perspectives

Car manufacturers in China can be divided into three groups: The Big 3, Joint

Ventures and New players.

The Big 3 are the three largest Chinese companies with a long history. They are SAIC,

FAW and DFM.

These 3 companies, if we take into account their Joint Ventures, have around 50% of

market share in China. FAW and DFM are supported by the central government while

SAIC is supported by the local government of Shanghai. These companies are mainly

focused on the domestic market. They have a good dealer network and their main

objective is to develop high/medium-end cars.

SAIC is exporting finished cars to Mongolia, Russia, the Middle East and South

America. To Africa, west Asia, middle Asia and south Asia, they export the spare

parts and they assemble the car in those countries. SAIC has 19 branches and offices

in America, Japan, Germany, Thailand, etc.

In the interview undertook in SAIC they said not to be interested in the U.S. or

European market yet. The reason is that they are not prepared and the effort needed is

not worthy.

DFM is exporting a small quantity: about 7,000 units in 2007 and 12,000 units in

2008. DFM is in process of developing their first own brand car.

FAW exports a quite big quantity of its own brands cars: 10, 336 units in 2004; 14,

256 units in 2005 and 10, 023 units in the first 9 months of 2008.

The Joint Ventures are between Multi National Companies (MNCs) and Chinese

companies. The MNCs want to win market share in the Chinese market, but the

policies in China ask them to be in Joint Ventures with china local companies to have

the right to assemble cars in China. They focus on the high/medium-end cars.

They are GM-SAIC, VW-SAIC, VW-FAW, Toyota-FAW, Peugeot/Citroen-DFM,

Nissan-DFM, Kia-DFM, etc.

They are in China for the domestic market. However, except Peugeot/Citroen-DFM,

the left 6 export small quantities abroad

The New players are younger and independent companies. Except Chery, most of the

others are not state-owned and were started by Chinese entrepreneurs. In general, they

have poor brand image. In the interviews undertook, some people stated that in

general the New Players produce low quality products, and also lack experience of

this industry. Eventhough, most of the New Players state that exporting cars to

foreign countries is one of their short term goals. They are Chery, Geely, Great Wall,

BYD, etc.



Figure 28. Main Players in the Automotive Industry in China.

See Annex IV for a brief explanation of the previous companies.

Company Shareholder Supporter4

FAW State owned company Central government

DFM State owned company Central government

SAIC State owned company5

Shanghai government

Geely Private Zhejiang government

Chery State owned company Anhui government

BYD PrivateShanxi government

BYD Group1

Great Wall Private Hebei government

Brilliance State owned company Liaoning government

Southeast2

State owned company Fujian government

Lifan3

Private Chongqing government

Chang'an* State owned company Central government

JAC State owned company Central government

BAW State owned company Beijing government

GAGC State owned company Guangdong government

JMCG* State owned company Central government

1. BYD Group is a HongKong listed company which main business is rechargeable batteries.

2. Southease also called FJMG.

3. AIG Group has bought 3.5% share of Lifan Group, so Lifan now is a joint venture.

4. The institution that has influence in the decision making process.

5. Although SAIC Motor is in the Shanghai Stock exchange it belongs 100% to SAIC Group which owner is the

Shanghai Government.

* China South Industries Group Corporation hold shares of Chang'an and JMCG.

Figure 29. Some of the main car manufacturers companies ownership and Government support.

Joint Ventures

GM – SAIC

VW – SAIC

VW – FAW

Toyota - FAW

Peugeot/Citroen – DFM

Nissan – DFM

Kia – DFM

etc.

The Big 3

SAIC

FAW

DFM

New Players

Chery

Geely

Great Wall

BYD

etc.



.

Joint Ventures

MNC’s are not allowed to be independent. They can only manufacture in China

if they establish a Joint Venture with a local company.

They focus on high/medium-end cars.

The contracts signed among the MNC’s and the Big Three specify that the cars

manufactured in China will not be sold overseas. However, we have found some

exceptions.

The contracts signed among the MNC’s and the Big Three specify that the

MNC’s cannot use the JV’s dealers network but they have to set up their own

distribution channel.*

Most of MNC’s state that they have no intentions of delocalizing the EU and US

production to China or other Asian countries.

*MNC’s can both, sell the cars produced by their Joint Ventures in China, or import and sell the cars they

produce themselves abroad. For this second case, MNCs are not allowed to use the JVs dealer network.

The big 3

They are supported by the central government or regional government.

The Big three want to focus on high/medium-end cars.

The big three are focused on the Chinese market which is in huge expansion.

SAIC states to have no intention to export.

SAIC is exporting small quantities but they affirm is more for acquiring

knowledge from abroad than for a real commitment to conquer foreign markets.

New players

They are supported by the local governments.

They want to focus on small low-end cars.

They state selling abroad is one of their main objectives.

They will sell first to developing countries and later to EU and US.

Experts in the industry consider these statements have two objectives:

Marketing strategy: each time one of these companies announces the

launching of one model abroad, the sales inside China increase.

They ask for financing to the government to support their international

expansion and later they use the resources for other purposes.



Market shares of major passenger car manufacturers in China

10%

9%

8%

7%

7%

6%5%5%4%

3%3%

33%

SGM

SVW

FAW-VW

Chery Auto

Beijing Hyundai

Guangzhou Honda

Tianjin Faw Toyota

Tianjin Xiali(daihatsu)

Chang'an auto(suzuki/ford)

Geely Auto

Dongfeng Kia

Other companies

Figure 30. Market share of major passenger car manufacturers in China, based on sales during

2006. Source: SAIC Group.

Sales volume of majority passenger car manufacturers in China

Joint Ventures

0100,000200,000300,000400,000500,000600,000

SAIC G

M Wulin

g

Shanghai GM

FAW-V

W

Shanghai-VW

Guangzhou Honda

FAW Toyota

Dongfeng Nissan

Beijing H

yundai

Chang’an Ford Mazda

Dongfeng Peugeot C

it...

Tianjin FAW

Guangzhou Toyota

FAW H

ainan

Dongfeng Honda

Chang’an Suzuki

Dongfeng Yueda K

ia

Changhe Suzuki

Brilliance B

MW

Beijing B

enz-Daim

ler...

Zhengzhou Nissan

(Un

its)

2007 2006

Figure 31. Sales volume of major passenger car manufacturers in China: Joint Ventures (Top

range by 2007). Source: Inter China Analysis (2007)

Sales volume of majority passenger car manufacturers in China

Domestic Automakers

0

100,000

200,000

300,000

400,000

Chery

Chang’AnGeely

Hafei

Brilliance Auto

BYDFAW

Great Wall

Jianghuai (JAC)

Soueast

Changfeng

Nanya Auto (Fiat)

SAIC

Jiangling

Zhongxing

(Un

its)

2007 2006

Figure 32. Sales volume of major passenger car manufacturers in China: Domestic Automakers

(Top range by 2007). Source: Inter China Analysis (2007)



The cars produced in China by the joint ventures in general have similar quality than

the ones produced in Europe or U.S. Consequently could pass the homologation

process without problems. Some people interviewed argued thought that in the

EuroNCAP ranking test these made in China cars would have lower punctuation that

the same cars made in Europe or US. The reasons are mainly two: first not all the

components used in the made in China cars are the same than the ones made in the

West; the quality of some of the components can be lower, lowering though the

overall performance of the car. Second, as the made in China cars are for the domestic

market that is less demanding in quality, there is no reason to produce higher quality

and consequently more expensive cars. Consequently, if the joint ventures want to

export cars to West Europe or U.S., they cannot use the same cars produced for the

domestic market to be sold abroad; they have to produce separate series of cars that

would have higher performance. From a production point of view this would be very

inefficient. Consequently they would just improve all the production independently of

their destination.

We have been told that some JV’s have plants only for export. For example one JV of

Honda is exporting cars to Western Europe. These cars meet the European

requirements in emissions and security.

The other joint ventures that are exporting are doing it mainly to Eastern Europe,

Russia (despite of recently the Russian exports have decreased considerably because

the government has increased the taxes in imports) and North Africa. GM exports to

Ukraine. Nissan exports a small volume to Eastern Europe. Changfeng Motor (JV

with Mitsubishi Motors) plan to begin selling in Europe around 2011.

Some experts say that the cars made by Chinese local companies, Big 3 and New

Players, are still far away to reach the quality standards required by the European

consumers. The reason why Chinese companies might show their cars in the

International fairs like recently in Detroit, and keep announcing the sales in Europe

and U.S. is a marketing strategy. The Chinese consumers might think the quality of

these cars is better if they are sold in Europe or U.S.

The cars from the big Chinese companies and the New Players are exported to

developing countries because the requirements to sell these cars in those countries are

much lower. In general, Chinese cars do not accomplish the emissions standards

requirements. SAIC, (Shanghai Automobile Industry Corporation) export to Latin

America directly from China (without triangulation in Europe). The main market for

SAIC in the Mediterranean is North Africa. The volumes are increasing as we can see

in Annex V.



1.1 SWOT analysis of the main group players in the market



1.2 Plans for expansion of car makers

In this chapter, first of all we will focus on Chery and Geely, two of the most

successful Chinese companies. We will analyze what have made them successful and

which plans they have in the pipeline. Second, we will talk about the new energy

vehicles. China, that in 2008 produced only 2,000 units of hybrid and electric vehicles,

has as an objective to produce half million of these vehicles in 2011.

a) Chery and Geely

Chery and Geely are two of the local Chinese companies that are being very

successful. The reason might be in their ability to recognize at an early stage that the

Chinese market preferred smaller vehicles than the ones that were sold by the Joint

Ventures (Joint Ventures sold the same cars that were sold in Europe and the U.S.).

Evolution of vehicle production

79,565

185,588

302,478

380,817

92,558

149,532

204,331219,512

0

100,000

200,000

300,000

400,000

(Un

its

)

2004

2005

2006

2007

Figure 33. Evolution of automobile production for Chery and Geely. Source: Inter China

Analysis data (Originally from www.autoingo.gov.cn )

The decision by the Government to change the tax policy promoting the purchase of

new cars in April 2006, gave an advantage to Chery and Geely. The government

decided to lower the consumer tax rates on vehicles between 1 and 1.5 liters, going

from 5% to 3%. At the same time, vehicles with engines over 2 liters would have to

pay a tax of up to a maximum of 20%. The government also lifted the restrictions that

existed on the circulation of small displacement cars on some of the main avenues of

Beijing and other cities24

. In the following paragraphs we will analyze in more detail

Geely and Chery.

24

Professors Nueno Case Study: Geely’s International Strategy.

http://www.autoingo.gov.cn/



Geely

Geely is China’s first and largest private auto company. Currently, it is in the

process of bidding for Ford’s Volvo. Other Chinese companies like SAIC,

Chang’an and Chery have also showed interest in buying Volvo. However, it

seems Geely could be the one that does it. Nevertheless, many opposite

opinions in the news have been found. It is even said, that Geely’s interest in

buying Volvo is only a marketing strategy to win popularity in foreign

markets. On the other hand, there is no doubt that for Geely would be much

easier to access the developed markets by buying Volvo than by beginning

from scratch. Even so, acquisitions are always complicate and the success

cannot be taken for granted.

We have been told that Geely is going to try to enter the European market first.

Chery

In August 2007 Fiat signed an agreement with Chery to set up a 50/50 joint

venture in Wuhu, Anhui Province. The plant was supposed to start in 2009

with the assembly of 175,000 Fiat, Alfa Romeo and Chery models annually.

However, the government is holding back the approval of the plan due to fears

of overcapacity. Furthermore, Chery has been strongly affected by the world

recession and has given up its expansion plans.

Conducting this research we have found out that Chery is working very hard

to introduce its cars to U.S. first. The U.S. government is going to ask them to

invest a big amount of money in U.S. to allow them to sell the cars there. We

have been told that they are not working yet to introduce the cars in Europe 25.

However, once they have entered the U.S. market probably they will focus

their efforts in entering the European market.

There might be some relevant contradictions about Chery’s plans. On the one

hand, Chery states that they have not passed the European homologation,

statement that has also been confirmed to us in the interviews. On the other

hand, according to the news and confirmed by a logistic operator company,

Chery’s cars are already in western Europe. However, our most reliable

information is that Chery is in process of entering the U.S. market while they

have put in stand by the plans to enter the European market.

Interestingly, Geely plans to enter the European market first and Chery plans to start

exporting to the US, the different approach for these companies might have much to

do with the fact that U.S. regulations are more restrictive in safety issues and

European regulations are more restrictive in gas emissions.

Nevertheless, recently the Chinese government has told the Chinese car

manufacturers that they should not rush to enter the European and U.S. market. The

Government suggests concentrating in exporting to developing countries first. The

real impact of this message from the government on the Chinese automotive industry

is not clear yet.



b) New Technology cars

There are two Chinese companies pushing strong for the development of hybrid cars

that could be exported worldwide: BYD and Chery.

BYD launched the F3DM, a hybrid car, on December 15, 2008. In fact it is a

“combination of EV (electric vehicle mode) and HEV (hybrid electric vehicle mode)”

or a plug-in hybrid electric vehicle (PHEV) that can be recharged on an ordinary

electricity outlet. The particularity or competitive advantage of this car is that it does

not depend on a professional charging station. The founder and chairman of BYD

said at the launch ceremony in Shenzhen that the company plans to sell the DM cars

(F3DM, F6DM) in North America and Europe in 2 – 3 years.

Figure 34. e6 BYD electric car.

Wang Gang, China’s Minister of Science and Technology said in a weekend

conference in Tianjin that “the country plans to expand investment in developing fuel

efficient, hybrid and electric vehicles in the short-and mid-term and fuel cell vehicles

in the long-term.” He also added that “speeding up the commercialization process of

fuel efficient and new energy vehicles will be a primary task for China’s auto

industry”25

.

1.3 Perspectives of consolidation in the industry

In this chapter, first we will summarize the government plans to revitalize the

automotive industry in China to overcome the current recession and to build big local

companies able to compete in the global market. Secondly, we will review which are

the expected mergers and acquisitions among the Chinese automobile manufacturers.

a) Government plans to enhance the industry

At the end of 2008, Chinese government announced a plan for “revitalizing and

adjusting China’s automotive industry” because it is expected to be one of the pillars

in the Chinese economy:

In April 2009, the government was expected to announce new policies to

stimulate the automobile financing.

25

China Automotive Review December 2008.



In June 2009, the government will announce the policies to encourage the new

energy vehicles.

In July 2009 the government will announce new policies to encourage the

consolidation in the automotive industry. The objective is to facilitate the

mergers & acquisitions.

In December 2009 the government will announced new policies to encourage

credit for automobile consumers and will announce the plan to construct the

infrastructure for the new energy vehicles.

b) Future mergers and acquisitions

As said before, it is very likely that the automotive industry in China will go through

a period of massive consolidation. 100 or 120 car manufacturers in China is more

than a healthy industry can hold in one country. The government is pushing the

companies to consolidate with the objective to have in a near future 5 big companies

whose production capacity can be over 2 million units per year and that can compete

with the traditional world leaders. Beijing also wants to build several smaller auto

groups which can produce 1 million units per year.26 The Government Plan suggests

to concentrate 90% of the domestic market share in 10 car manufacturers. However

CICC (China International Capital Co. Ltd )

27 reported that there will be 6 big players

not five. According to them, the leaders in the restructuring will be FAW, SAIC,

Dongfeng, Southeast Motor, BAW (Beijing Auto Work) and GAIC (Guangzhou

Automobile Group Co., Ltd).

In the following months we expect to find more and more news about mergers and

acquisitions in the automotive industry in China. Furthermore, China government has

asked to most of the manufacturing industries to slow down their intentions to merge

with foreign enterprises. This is a signal that they want the Chinese companies to

concentrate their efforts in building big Chinese companies.

This process of consolidation of the industry began some years ago. Among the Big 3,

the most important milestones are the following ones:

In 2002, FAW strengthen itself through the acquisition of TJAM and reached

1,7 million units of production capacity in 2008.

In Dec. 26th 2007 SAIC became the first giant in China through the

acquisition of NAC (Nanjing Automobile Group Corporation) and reached 2

million units production capacity in 2008. In the interviews we were told that

in 2009 SAIC will focus on the management to enhance the profit instead of

mergers & acquisitions. They told us that the key point is not to fail in the

26

The production capacity of China local automakers are too far away from the foreign players, for

example, the whole production capacity of China whole vehicle makers (including 80 groups) even can

not reach that of Honda or GM alone.

27 CICC is and investment bank in China established in 1995, its shareholders are Chinese and foreign

financial institutions and companies like Morgan Stanley, China Jianyin Investment Limited and the

Singapore government.



mergers. Those who succeed in this process of consolidation of the industry

will lead the automotive industry in China.

Dongfeng group merged with Hafei in 2008. From this merger, Dongfeng has

benefit from a stronger brand, an important operational base in Shenzhen, and

a capacity of 1,3 million units a year.

Other milestones are28

:

GAIC built a joint venture with HINO (Guangqi HINO Motors) to expand in

the South of China;

Chang’an developed his own branded cars and new energy vehicles through

the acquisition of Jiangling;

2007 China South bought Shanxi Auto Group;

2007 SAIC, Nanjing IVECO and Chongqing Hongyan built a joint venture

together; Zhejiang Zhongtai bought 70% share of Jiangnan auto to develop

their passenger car business;

2007 Liaoning Shuguang, Liaoning Dandong Huanghai and Changzhou

Changke built a joint venture together.

Other expected movements are:

Anhui province plans to merge their own automotive industry to build a new

giant auto group that can compete with foreign companies. Anhui provincial

government, following the indications of the central government is pushing

hard to have the automakers in their province to consolidate. The idea is to

have the three big auto groups from Anhui province: Jac29

, Chery, CAMC

merge together. As the three companies are controlled by the local

government of Anhui Province and all are self-brands and they have no joint

ventures with foreign companies, it will be easier to merge these companies.

On the news, regarding JAC and Chery, we have found two possibilities:

Jac will become one of the share holders of Chery, and Chery will be pushed

to be a listed company together with Jac.

Merge Jac and Chery together to become Anhui automotive group. (2009

March. 3rd. Jac press released that the merger is under discussion).

On other news, we have found that the Plan encourages 4 giants (SAIC, Dongfeng

Motor, FAW and Chang’an) to lead the merger in the domestic market. Other 4

companies in different regions will be the second group encouraged: Beijing Motor in

Beijing, GAIC in Guangzhou, Chery in Anhui and Sinotruck30

in Shandong. Except

28

Some of these companies are small local companies (they are not in Annex II).

29 Jac used to have the biggest profit growth rate in China automotive industry, and he used to focus on

the light weight truck, commercial vehicle, chassis and MPV. But all of these advantages ended with

its entrance of passenger car. Its profit began to go down since 2008.

30 Local producer in Shandong province that focus on heavy-duty truck



Sinotruck, the other 7 groups all ranged into top 8 in sales volume and together took

75.5% market share.

The possibility for the merger between big giants and medium size enterprises are

relatively smaller because they need the approval of the regional governments.

2. Decision making process along the logistic chain

Figure 35. Car industry logistics chain simplified overview.

In the past was said that who controls the two extrems in the supply chain has the

power over the whole chain. However, since the shipping companies entered the

logistics business, they play a very important role in the decision making process.

Among the supply chain for cars, sometimes these companies have much higher

weight than the rest of the companies. That is for example the case of NYK the

biggest shipping company for RoRo transportation. NYK has restructured the

company and they want to focus in logistics because they believe is where most of the

value added is. NYK has terminals in Zeebrugge, Anvers, Gioia Tauro and Limassol

(Cyprus). It also has shares in the four main RoRo terminals in China: Shanghai,

Tianjin, Dalian and Guanzhou. They will also have a terminal in the Port of Mundra

in India.

NYK is using the Port of Gioa Tauro as entry port for the cars in the Mediterranean.

From Gioa Tauro the cars are distributed in the Mediterranean by feeder. A big

percentage of the cars go to North Africa. The company that ships these cars by

feeder is called UECC. This company belongs 50% to NYK and 50% to WWL.

Nanjing Port, Chery RoRo terminal in Wuhu, Wuhan Port and Chongqin Port (this

last one has three small RoRo terminals: Chongqin, Fuling and Wanzhou) are the

main Ports with RoRo terminals in the Yangtze River.



Yangtze River has three major operators:

1. Yangtze shipping company also called Changjiang shipping company (CSC)31

;

2. Mingsheng in Chongqing;

3. Ansheng shipping, which is under the control of Shanghai Anji (Shanghai

Anji only navigates down to Wuhan while Mingsheng shipping and

Changjiang shipping cover the whole Yangtze River).

The big international shipping compaines can use the current facilities of these

domestic companies. In other words, they seem not to be thinking in acquiring

terminals or navigate in the Yangtze river but in stablishing alliances with the

companies that control the river.

Most of the shipping of cars are by the following companies:

NYK has an alliance with COSCO;

ToyoFuji is an in house shipping company of Toyota and they have and

alliance with CSC;

K-Line has an alliance with CGS;

MOL has an alliance with Sinotrans;

COSCO and Sinotrans are leading shipping lines in China. They provide North-South

service (regular service between Tianjin, Shanghai, Guangzhou and down to Hainan

from the south to north line).

Some experts in the logistics industry in China think that the Yangtze River will play

a major important role in China in a near future. Due to the increase of labor cost in

East China, many companies are moving their production centers to the west. As the

water transportation is cheaper than the road transportation and China lacks of a good

land transportation infrastructure, most of these companies are moving to cities along

the Yangtze River.

However, one logistics company told us that what might happen is that once the train

following the Yangtze River, from Chongqing to Shanghai is constructed, the cargo

will be moved to the coast by train and not by ship. They think that the navigation in

the Yangtze River is not easy. The train could cut down the transportation days from

10 to 5 days from Chongqing to Shanghai.

31

CSC RoRo, a company belonging to CSC Group, it is said to be the first and largest RoRo shipping

company in China, and has the highest RoRo market share and wide customers group; however we

have not verified this information. Now, probably it owns the largest RoRo fleets in China. Its business

network can cover Yangtze River, domestic coast and ocean. CSC RoRo has set up good and long-

term relations with domestic automobile manufacturing company in China. Its customers are: Toyota,

FAW, Shanghai VW, Dongfeng, Haima, Chery, etc.

Changjiang Shipping is going to merge with Sinotrans. CSC has two main companies, one is in the

Yangtze River, another is in Shenzhen. The company from Shenzhen has built a JV with ToyoFuji

named CFML.



If the Yangtze River becomes a strategic pillar in the logistics chain, two things can

happen; several cities along the river can concentrate car manufacturer’s plants; each

of these cities then will have a RoRo terminal to ship the cars to Shanghai Port RoRo

terminal; or one city concentrates most of the production of cars in the Yangtze River.

In this last case, a big RoRo Terminal will be developed in that city. In the last

scenario, will be interesting to try to anticipate which is going to be this city in order

to establish alliances.

Some logistics service providers or distributors helped introduced in Europe Japanese

and Korean brands. In our interviews we have been told that these same companies

are approaching now Chinese car manufacturers. Remember that the image of

Japanese cars 40 years ago and Korean cars 15 years ago was the same as the image

of Chinese cars today.



IV Scenarios and conclusions

1. Scenarios: development routes

1.1 Drivers

1. The recovery of the Chinese Economy might come sooner than the European and

the U.S. economy’s recovery. Automotive companies in Europe and the U.S. are

among the most affected by the recession. Chinese automotive companies can react in

different ways to this fact.

2. Chinese government has labeled the Automotive Industry as a main pillar to

support the development of the national economy. As it has been analyzed in the

report, the current situation in the car industry in China is not sustainable. The

Chinese automotive industry cannot have a healthy development with the existing

surplus of manufacturers (around 100 car manufacturers).

Consequently, the government is pushing for the consolidation of the industry. The

government has a plan to reduce the number of car manufacturers in China to a group

of 5 Big companies and some few other medium ones.

Since the Chinese government controls the bank loans, it has a big power in the

decision making process of any merger or acquisition. In fact, the government could

almost determine which companies are merged together. The bigger the companies

resulting from the consolidation, the more power they will have. Besides, this new

companies will have enough capacity to begin to export massively. However, we

should not underestimate the complexity of the mergers & acquisitions.

3. China is facing tremendous environmental problems. The main ones are related

to the water availability and quality, and the air quality in the over crowded Chinese

cities. The situation has reached a critical degree where people’s health is at risk. The

government is taking action to avoid irreversible damages by the pollution and to

improve the quality of living.

4. With China entrance in the WTO, sooner or later the automotive industry will be

liberalized. When the moment arrives, the MNCs will not be forced to have a

Chinese partner. In this scenario, MNCs will choose to establish an independent

operation in China and therefore, the JVs will disappear. However it is not clear what

will happen in the market. Some people believe that Chinese manufacturers will buy

the assets from the JV. Other people defend that MNC will be in a very weak position

in the domestic market because, even if they acquire the Chinese part of the JV, from

one day to another they will lose their dealer network.

5. Protectionist politics worldwide: Chinese companies exporting abroad will not

only depend on their own capabilities to produce cars acceptable by the customers

and standards of the different countries. The protectionist policies that the

government may put in place to protect their national car manufacturers will

definitely play a main role.



1.2 Tendencies

According to the structure followed in the third part of the report: Micro Analysis, we

have divided the scenarios in the three main groups of players of car manufacturers in

China: the Big 3, the Joint Ventures and the New Players. According to the drivers

considered above, the tendencies for these groups and the main companies inside

these groups will be developed.

a) Big 3 (or Big 5)

In the short term we will continue to see a period of mergers & acquisitions driven

mainly by the Government plan to consolidate the industry. We will see the

emergence of 5 big automotive groups in China that will have the necessary scale to

compete in the international market. SAIC and FAW are quite clear that will be

among the 5 chosen by the central government. The question mark is which will be

the other three. There are different opinions.

One possibility is a merger between DFM, GAIC and ChangChun. We believe that

since DFM is one of the actual Big 3, it will probably keep his position among the

Big 5. However it cannot be taken for granted.

Other people talk about a big group from Anhui appearing after the consolidation of

Chery, JAC and CAMC.

The Chinese government could also decide to support FJMG as one of the five big

ones. Some sources consider Southeast is not to be underestimated either; however,

we think there are few chances it will become one of the Big 5 leading car

manufacturer in China.

Driven by the fact that probably the Chinese economy will recover faster from the

recession than Europe and U.S. we can have two scenarios:

On one hand, Chinese automotive companies, with the finance support of the

government could decide to buy out western companies.

On the other hand, Chinese companies could wait for some of the car

manufacturers in the west to go bankrupt and then buy their assets.

However, although many people is speculating about one or both of these two

scenarios, it is not so clear that Chinese car manufacturers will be interested in

acquiring western companies or buying their assets. We need to keep in mind that

western companies are having many difficulties due to their labor rigidities and poor

financial situation.

b) JV’s

Driven by the liberalization of the industry, that will happen in a near or mid term

future, the JV will have no reason to exist. In this scenario on one hand MNCs will

lose the dealer network and be forced to begin from zero to develop their own

commercial network. On the other hand, MNCs would prefer to operate

independently because of higher control and lower risk of losing know-how. The

local Chinese partners in one hand are making a good profit from these JVs because



most of their revenues come from JV sales. However, on the other hand, once they

are able to produce their own cars with a similar quality of those produced by the JVs,

they believe that Chinese consumers will prefer to buy Chinese brands.

JVs seem to be focused in the China market and we have not found any trace or

tendency of change. JVs state to have no plans and no interest in exporting massively

China made cars. However, we have seen Honda is already exporting cars and some

other JVs are setting plants only for export.

Nevertheless, we should not forget that they are still in the battle to win market share

in China. Although the JV’s have a big market share compared to the local companies,

the market is still very fragmented and the each time better performing Chinese car

brands are a real threat.

Furthermore, there are some things that the JV’s should take into account:

The risk of losing their know-how seems to be much higher than the potential

cost savings.

It seems quite sure that China made cars will not have the quality of the

European or U.S. made cars yet. This is because of the supplier’s standards

and raw materials quality.

The governmental pressures in Europe or U.S. to protect the automotive

industry are not negligible.

For big quantity exports the cost advantage of China is not enough to

counteract the transportation and logistic expenses. Exporting from China

only makes sense for small quantities. For big quantities it makes more sense

to localize the production.

c) New Players

Some of the New Players can leverage on the financial support of the government to

acquire or merge with other companies. We should not forget that mergers have many

risks, and that the resulting company may not be able to take advantage of the

potential synergies. Consequently, in one hand these companies could become bigger

and stronger but they could also lose competitiveness and fail in the process of

integration after the mergers. Bigger companies could have more necessity in

exporting. They could use the overcapacity built in China in recent years before the

actual recession, to sell abroad. However, their export sales will clearly depend on the

protectionist tendencies worldwide.

In fact some of the New Players are announcing on the press their interest in

conquering Europe and the U.S. market. The companies that seem more likely to

reach this goal in a short term are Geely, Chery, BYD and Great Wall motors.

Geely planned to sell cars in Europe in 2007 but it did not manage to reach the market

standards. Nowadays Geely is exporting to Russia, Ukraine and the Middle East. It

plans to sell in Europe starting from countries that have no major car industry of their

own like the Netherlands or Austria. Later it plans to export to developed markets



with a strong local car industry, such as France, Germany, Spain or the United States.

Geely’s plan is to be able to do so on 2011.

BYD Auto also plans to begin selling in Europe around 2011.

We believe that Great Wall is a company that is worth keeping an eye on. They

maintain a low profile compared to Chery or BYD. Although they also produce

passenger cars (See Annex III), their most successful business is exporting pick-ups.

We think it might be possible in a short time to see Great Wall pick ups driven in

West European countries. As this company is well known for its pickups and not for

its passenger cars, we have not studied it in detailed. However we consider it a good

company to approach.

During the interviews conducted for this research, we have learned about the hidden

intentions of the New Players in showing off that they want to export massively. First

of all, it is a marketing strategy: each time one of these companies announces the

launching of one model abroad, the sales inside China increase. Secondly, they ask

for financing to the government to support their international expansion and later they

use the resources for other purposes.

Another tendency is that Chinese car manufacturers, mainly the main players, are for

the first time making great efforts and spending money on research to develop their

own brand affordable clean energy vehicles (electric and hybrid cars). This is driven

by the environmental pressure enforced by the Chinese government. Previously other

brands of cars like Toyota have developed clean energy vehicles. However, these cars

were targeting high end and environmentally sensitive consumers. Chinese brands

might have a different approach. They might try to produce a low consumption cheap

car. This car might generate a large amount of sales since it would target a much

larger population inside and outside China.

2. Conclusions

The main regions for the massive export of China made cars are Eastern Europe and

North America. The exports to North Africa are much smaller than the ones to East

Europe. The last three years the exports have been decreasing. However, from 2004

to 2006 they increased 4 times. Some hubs will appear for the distribution of the cars

exported to Western Europe and North Africa.

In relation with the scenarios described in the chapter tendencies, we recommend to

keep studying some of the companies among the New Players. These companies,

which are already exporting to developing countries, are likely to start exporting to

developed countries in some years. These companies do not have a good dealer

network in foreign countries. They need to build alliances and probably they will

approach the same logistic companies and distributors that some years ago introduced

the Japanese and Korean cars in U.S. and Europe.

We also recommend keeping studying the process of delocalization of the industry

towards the west of China and the role that are going to play the terminals in the

Yangtze River.



Finally, given the many changes expected in the industry in China, we have to be

aware that things will change very fast and new scenarios could appear. Furthermore,

in China, it is important to keep in mind the high influence that the government has

on the companies. Consequently, we estimate very valuable to pay attention to the

new policies implemented by the government to be able to extrapolate which will be

the role played by each car manufacturer in the future. Particularly, this will allow us

to estimate the brands that will start to massively export cars from China.



V Annexes

1. Relations established between foreign and local car manufacturers.

2. Car manufacturers in China.

3. Car models produced in China.

4. Summary of some relevant companies.

5. Export and import data of Passenger Cars.

6. Registration volume of imported passenger cars by origin, brand and model.

7. Registration volume of top 30 imported passenger cars models in top five

administrative units.

8. Comparative of data from different sources of information.

9. Overview of the main RoRo terminals in China.

10. Homologation in EC (EWVTA) (list of Applicable directives).

11. Overview of the production centers situation.



Annex I. Relations established between foreign and local car

manufacturers

Note: GAIC also called GAGC.



Annex II. Car manufacturers in China

Chinese Name English Name Chinese Name English Name 2006 2007

1 FAW-VW 中国第一汽车集团公司 FAW

德国大众汽车股份公司奥迪汽车股份公司 VWAUDI AG 345,318 461,369

2

Tianjin Faw Toyota

Sichuan FAW Toyota

Changchun Fengyue

land Cruiser Prius 中国第一汽车集团公司 FAW 丰田汽车公司 TOYOTA 219,466 282,632

3 FAW-Haima 中国第一汽车集团公司 FAW 日本马自达（战略合作伙伴） MAZDA(Japan)

4 Shanghai VW 上海汽车集团股份有限公司 SAIC 德国大众汽车股份公司 VW 349,088 456,464

5 Shanghai GM 上海汽车集团股份有限公司 SAIC 美国通用汽车公司 GM 403,402 495,405

6 SGM Norsom 上海汽车集团股份有限公司 SAIC

通用汽车中国公司上海通用汽车有限公司 GM(China)GM(Shanghai)

7 SAIC GM Wuling

上海汽车集团股份有限公司柳州五菱

SAIC

Liuzhou Wuling 美国通用汽车公司 GM 408,432 496,628

8 Dongfeng Peugeot Citroen 东风汽车公司 Dongfeng 标致雪铁龙集团 PSA 201,318 207,255

9 Zhengzhou Nissan 东风汽车有限公司 Dongfeng 日产汽车公司 NISSAN 6,543 13,123

10 Dongfeng Nissan 东风汽车有限公司 Dongfeng 日产汽车公司 NISSAN 203,537 272,196

11 Dongfeng Honda 东风汽车有限公司 Dongfeng 本田公司 Honda 63,373 127,042

12 Dongfeng Yueda Kia

东风汽车有限公司江苏悦达投资股份有限公司

Dongfeng

Jiangsu Yueda 韩国起亚自动车株式会社 Kia motors corporation 115,000 101,436

13 Changan Ford Mazda 重庆长安汽车股份有限公司 Chongqing Chang‘an 福特汽车公司 / 马自达汽车公司 Ford / MAZDA 135,571 217,848

14 Chang'an Suzuke 重庆长安汽车股份有限公司 Chongqing Chang'an

铃木株式会社/双日株式会社

铃木(中国)投资有限公司

SUZUKI Motor Corporation

SUZUKI(China)

SOJITZ 112,097 108,230

15 Guangzhou Honda 广州汽车集团股份有限公司 GAIC 本田工业技研株式会社 Honda 260,096 295,299

16 Guangzhou Toyota 广州汽车集团股份有限公司 GAIC 丰田汽车公司 TOYOTA 61,254 170,294

17 Beijing Hyundai 北京汽车工业控股有限责任公司 BAW 韩国现代自动车株式会社 Kia motors corporation 290,011 231,137

18 Beijing Benz 北京汽车工业控股有限责任公司 BAW 戴姆勒-克莱斯勒股份公司 DaimlerChryslerAG 21,308 19,730

19 BMW-Brilliance 华晨中国汽车控股有限公司 CBA 宝马集团 BMW 23,735 32,249

20 Nanjing Fiat 南京跃进汽车集团公司 Nanjing Yuejing 意大利菲亚特汽车股份公司 FGA 31,898 19,691

21 Changhe Suzuki

江西昌河航空工业有限公司江西昌河汽车股份有限公司

Jiangxi Changhe aviation

Industries

Changhe Auto

铃木株式会社日本冈谷钢机株式会社

SUZUKI Motor Corporation

OKAYA 116,170 92,024

22 Changfeng Motor 长丰集团 Hebei Changfeng 日本三菱自动车工业株式会社等 MITSUBISHI MOTORS,etc

23 Southeast Motor1 东南汽车 FJMG 日本三菱自动车工业株式会社等 MITSUBISHI MOTORS,etc 40,056 45,679

28 FAW-Huali

一汽华利(天津)汽车有限公司（中国第一汽车集团公司控股） FAW-Huali

29 FAW-Hongta 一汽红塔云南汽车制造有限公司 FAW-Hongta

30 FAW-jilin 一汽吉林汽车有限公司 FAW-jilin

31 FAW-car 一汽轿车股份有限公司 FAW-car

32 FAW-Xiali

天津一汽夏利汽车股份有限公司（中国第一汽车集团公司控股） FAW-Xiali

25 SAIC Motor 上海汽车集团股份有限公司 SAIC Motor

26 SAIC Yizheng 上汽集团仪征汽车有限公司 SAIC Yizheng

27 Nanjing MG 南京名爵汽车有限公司 Nanjing MG 2

44 Hafei Motor 哈尔滨哈飞汽车工业集团有限公司 Hafei Motor 3

202,862 167,165

33 Dongfeng Liuzhou 东风柳州汽车有限公司 Dongfeng Liuzhou

34 Dongfeng Yuan 东风渝安车辆有限公司 Dongfeng Yuan

35 Beijing Automobile works 北京汽车制造厂有限公司 Beijing Automobile works 10,061 11,343

36 Beiqi Foton Motor 北汽福田汽车股份有限公司 Beiqi Foton Motor

37 Chery Auto 奇瑞汽车股份有限公司 Chery Auto 302,478 380,817

38 Geely Group 浙江吉利汽车有限公司 Geely Group 204,331 219,512

39 Geely Shanghai Maple 吉利控股集团上海华普汽车有限公司 Geely Shanghai Maple

40 BYD Auto 上海比亚迪汽车有限公司 BYD Auto 60,116 100,126

41 Great Wall Motor 长城汽车股份有限公司 Great Wall Motor 40,062 64,732

42 Tianjin Meiya Auto 天津天汽集团美亚汽车制造有限公司 Tianjin Meiya Auto

43 NAC Soyat

南京汽车集团有限公司无锡新雅途公司 NAC Soyat

45 Anhui Jianghuai Auto 安徽江淮汽车股份有限公司 Anhui Jianghuai Auto

46 Brilliance Jinbei 沈阳华晨金杯汽车有限公司 Brilliance Jinbei

47 Jiangnan Auto 江南汽车制造有限公司 Jiangnan Auto

48 Guizhou Aviation 中国贵州航空工业集团公司 Guizhou Aviation

49 Jilin Tongtian 吉林通田汽车有限公司 Jilin Tongtian

50 Hebei Zhongxing 河北中兴汽车制造有限公司 Hebei Zhongxing

51 Zhejiang Gonow Automobile 浙江吉奥汽车有限公司 Zhejiang Gonow Automobile

52 Qingling Motors(Group) 庆铃汽车(集团)有限公司 Qingling Motors(Group)

53 Chengdu Xindadi 成都新大地汽车有限责任公司 Chengdu Xindadi

54 JiangXi Huaxiang Fuqi 江西华翔富奇汽车有限公司 JiangXi Huaxiang Fuqi

55 Sichuan Automobile 四川汽车工业集团公司 Sichuan Automobile

56 Dandong Huanghai 辽宁曙光汽车集团股份有限公司 Dandong Huanghai

57 Chongqing Lifan Cars 重庆力帆集团汽车有限公司 Chongqing Lifan Cars

58 Shaanxi Aircraft 陕西飞机工业集团有限公司 Shaanxi Aircraft

59 Polarsun Automobile 中顺汽车控股有限公司 Polarsun Automobile

60 Rongcheng Huatai 荣成华泰汽车有限公司 Rongcheng Huatai

1. Southeast Motor in China also called Soueast Motor or Dongnan Motor.

2. Nanjing MG now has become SAIC-Nanjing MG

3. Dongfeng Group has bought Hafei Motor in 2008

4. Source: Inter China Analysis

Car Joint VenturesSales (Units)

4

No. Name

Chinese Company Foreign Company



Annex III. Car models produced in China

Maker Origin Brand

E Audi Note: E:European

E Sagitar N:North American

E Magotan J:Japanese

E Jetta K:Korean

E Bora C:Chinese

E New Bora

E Golf

E Caddy

E Passat

E Santana

E Octavia

E Polo Hatchback

E Polo Jingqing Hatchback

E Polo sedan

E Polo Jingqu sedan

E Cross Polo

E Golf touran

E Benz E

E Benz C

N Chrysler 3000C

N Sebring

N Cherokee

J Pajero Sport

J Outlander

C Utility Vehicle

BMW Brilliance E BMW

E Citroen Triomphe

E Peugeot

E Fukang

E Citroen Elysee

E C2

E Citroen Picasso

E Perla

E Palio

E Palio Weekend

E Siena

N Buick Royaum

N Buick Park Avenue

N Cadillac

N Buick Regal

N Buick LaCrosse

N Epica

N Excelle Sedan

N Excelle HRV

N Excelle wagon

N Sail Sedan

N Sail S-RV

N Aveo

N Lova

SGM Norsom N Buick

N Spark

C Wuling Utility vehicle

N Mondeo

N Mondeo Zhisheng

E Volvo

N Focus

J Mazda 3

N Fiesta

J Mazda 2

N S-MAX

Changan Ford Mazda

FAW-VW

Passenger Car by Origin and Brand

Shanghai GM

SAIC GM Wuling

Shanghai VW

Beijing Benz

Dongfeng Peugeot Citroen

Nanjing Fiat



J Crown Note: E:European

J Reiz N:North American

J Vios J:Japanese

J Corolla K:Korean

J New Corolla C:Chinese

Sichuan FAW Toyota J Prado

J Land Cruiser

J Prius

C Family

C Haima

C Freema

J Paladin

C Oting

C Tuyi

C Yumsun

J Teana

J Bluebird

J Sylphy

J Sunny

J Tiida

J Geniss

J Livina

J Qashqai

J Civc

J CR-V

J Accord

J Fit

J City

J Odyssey

Guangzhou Toyota J Camry

Honda China J Jazz

J Liana

J Wagon

J SX4

J Swift

J Alto

J Cultus

J Galant

J Lioncel

J New Lancer

J Freeca

J Soveran

N Chrysler Grand Voyager

N Dodge Caravan

J Veryca

K Optima

K Cerato

K Qianlima

K Rio

K Carnival

K Sportage

K Sontana

K Elantra

K Accent

K Tucson

K Terracan

K Santa Fe

SAIC Motor C Roewe

B Xingfu Shizhe

S Terios

C Freewind

C Xingfu Shizhe

C Highland Trooper

Tianjin FAW Toyota

Sichuan FAW Toyota

Changchun Fengyue

FAW-Haima

Zhenzhou Nissan

Dongfeng Honda

Dongfeng Nissan

Guangzhou Honda

Changhe Suzuki

Chang'an Suzuki

Changfeng Motor

Dongfeng Yueda Kia

Beijing Hyundai

Rongcheng Huatai

FAW-Huali

FAW-Honda



J Xenia Note: E:European

C Jiabao N:North American

J Red flag J:Japanese

J Mazda K:Korean

C Besturn C:Chinese

C Xiali

C Vizi

C Vela

C Weizhi

Dongfeng Liuzhou C Space Gear

Dongfeng Yuan C Dongfeng Utility Vehicle

C BJ Series

C Utility Vehicle

C Chuanqi

C MP-X

C Soyat

C Unique

Nanjing MG C MG

C Eastar

C A5

C A3

C Cowin

C QQ

C A1

C Eastar Cross

C Riich II

C Karry

C Tiggo

C Freedom Ship

C LG-1

C Vision

C Haoqing

C Beauty Leopard

C Uliou

C Hisoon

C Haifeng

C Hysoul

C Marindo

C F6

C F3

C Flyer(Auto based)

C Saibao

C Lobo

C Dingo

C Haifei Ulitily Vehicle

C Ideal

C Changhe Ulitily Vehicle

C Zhixiang

C Benben

C CM8

C JieXun

C Chang'an Ulitily Vehicle

Nanjing Chang'an C Nanjing Chang'an Ulitily Vehicle

C S-Driver

C Baowei

C Land Wind

C Fasion

C Benjoy

C Refine

C Rein

FAW-Jilin

FAW-Car

FAW-Xiali

Beijing Automobile Works

Beiqi Foton Motor

SAC Soyat

Chery Auto

Geely Group

Geely Shanghai Maple

BYD Auto

Haifei Motor

Jiangxi Changhe

Chang'an Auto

Jiangling Motors

Anhui Jianghuai Auto



C Zunchi Note: E:European

C Junjie N:North American

C Kubao J:Japanese

C Grace K:Korean

C Badao C:Chinese

C Alto

C Fairy

C Jiangnan

Guizhou Aviation C Yunque(Rex)

Jilin Tontian C Glow

C Admiral

C Cruiser

C Landmark

C Gwperi

C Safe

C Sing

C Pegasus

C Hover

C GS50

C GX

C Qibing

C Shunfeng

Qingling Motors(Group) C Rodeo

Chengdu xingdadi C Dadi

Jiangxi Huaxiang Fuqi C Fuqi

Sichuan Automobile C Yema

C Linghangzhe

C Aurora

C Tiaozhanzhe

C Qisheng

Chongqing Lifan Cars C Lifan

Shaanxi Aircraft C Shaanxi Aircraft Utility Veichle

ASAIC Yizheng C Yizheng Utility Veichle

Polarsun Automobile C Polarsun

Great Wall Motor

Zhejiang Gonow Automobile

Tianqi Meiya Auto

Dandong Huanghai

Brilliance Jingbei

(ZhongHua)

Jiangnan Auto

Hebei Zhongxing



Annex IV. Summary of some relevant companies

Company Overview：

SAIC Motor Corporation Ltd. (“SAIC Motor” for short), whose predecessor was Shanghai

Automotive Company Ltd., was listed on Shanghai Stock Exchange in November 1997. SAIC

Motor is currently the leading manufacturer of passenger cars, the largest mini-vehicle maker

as well as an automotive maker that enjoys the biggest sales volume in China.

SAIC Motor is one of the companies of SAIC Group. SAIC Group, a Fortune Global 500

company, is China’s largest automobile manufacturer with around 20% market share in China

and almost 60,000 employees.

In 2007, SAIC sold 1,690,000 vehicles, ranking top among China auto companies. Among

the total, 1,140,000 were passenger cars and 500,000 were commercial vehicles.

SAIC Motor encompasses all of SAIC Group’s assets in automotive assembly, power train,

chassis, and vehicle electronics, as well as financial services.

SAIC Group is wholly owned by Shanghai Municipal Government.

Products:

Passenger cars: Roewe, MG (SAIC Motor), Wuling Utility vehicle, SangYong, etc.

Commercial Vehicles: Volvo, HongYan, Huizhong, etc.

Manufacturer bases:

Shengyang, Yantai, Qindao, Yizheng, Nanjing, Shanghai, Chongqing and Liuzhou

Domestic Layout:

Shenyang SGM Beisheng（40,000）, Yantai SGM Dongyue（240,000, Qingdao SAIC-GM-

Wuling （ 50,000 ） , Yizheng SAIC Yizheng （ 120,000, Chongqing SAIC Hongyan

（20,000）, Liuzhou SAIC-GM-Wuling（420,000）

（figures）refers to production capacity

Exports to：

Europe, Syria, Libya, Chile, Mongolia and Russia

Company Overview：

FAW Group is a global leader in the vehicle manufacturing industry with a 50-year history.

Founded in 1953, FAW employs 133,000 people around the world and sells products in over

70 countries. FAW is a diversified maker of quality light, medium, and heavy-duty trucks,

automobiles, municipal buses and luxury tourist coaches, custom bus chassis, and mini-

vehicles with total sales in excess of 7 million vehicles worldwide. They cooperate with other

world leaders including Audi AG, Ford Motor Company, Hyundai Motor Company, Mazda

Motor Corporation, Toyota Motor Corporation, and Volkswagen AG.

Products:

FAW now produces hundreds of models of light, medium, and heavy trucks.

It holds its own brands: JieFang, HongQi, BenTeng, XiaLi, Weizhi, etc and also has joint venture brands with VW, Audi, Toyota, Mazda, etc.

FAW's current production strategies put a heavier emphasis on the commercial truck



industry.

Manufacturer bases:

FAW's production bases are located in northeast China's Jilin and Heilongjiang provinces,

east China's Shandong province and Tianjin municipality, south China's Hainan province, and

southwest China's Sichuan and Yunnan provinces.

FAW's state-of-the-art government-certified engineering development and test center, China's

largest and most extensive automotive R&D facility, is the country's leader in automobile and

commercial vehicle research. The company's total assets are valued at 109.85 billion Yuan

(US $14.27 billion).

Exports to：

About 21 countries including U.S., Uzbekistan, Kazakhstan, Mongolia，etc.

Company Overview：

Founded in 1969, Dongfeng Motor Corporation (hereafter referred to as DFM), previously

named Second Automobile Works Co., is one of the 3 giant auto makers in China. Its main

businesses include passenger vehicles, commercial vehicles, engine, auto parts & components,

and equipment.

Products: In 2007, Dongfeng reached the biggest market share in medium/heavy duty commercial

vehicle and medium duty bus of Chinese market.

Manufacturer bases: The major business facilities are located in Shiyan, Xiangfan, Wuhan and Guangzhou. In

addition, several branches are placed in Shanghai, Liuzhou (Guangxi), Yancheng (Guangxi),

Nanchong (Sichuan), Zhengzhou (Henan), Urumuchi (Xinjiang), Chaoyang (liangning),

Hangzhou (Zhejiang), Kunming (Yunnan), etc.

As of 2007, DFM has gained an annual output of 1,137,000 vehicles, a sales income of

￥164,800,000,000, 12.94% market shares and 121,000 employees. The company ranks 20th

in TOP 500 of domestic enterprises and 5th in TOP 500 of domestic manufacturers

respectively.

Exports to：

More than 40 countries and regions over the world, and has established several markets such

as Iran, Vietnam, Russia, Algeria. Recently, Dongfeng Motor is arranging the after-sale

services in Russia, Egypt and Saudi Arabia.



Company Overview：

Chery Automobile co., Ltd. is a Chinese automobile manufacturer founded in 1997 and

located in Wuhu (Anhui province). Chery has 18,000 employees. The first car of Chery

Company reached the market in December of 1999.

Until 2003 Chery belonged to SAIC (Shanghai automotive industry company). Now is

separated from SAIC and is controlled by several national investment firms and government.

Chery has now one R&D center, two gear box factory and one engine factory in China. Chery

now is working in building a world famous brand.

Products:

Chery has 4 sub-brands: Chery, Riich, Rely and Keryy. Under these sub-brands there are 11

series: QQ3, QQ6, A1, Riich2, Qiyun, Karry3, A5, Tiggo3 Eastar, Cross, A3,etc.

Manufacturer bases: Chery now has a whole-car manufacture ability of 650,000 units annual and has its own R&D

center.

Exports to：

Chery exports have been ranged top 1 for 5 years among car manufacturers established in

China. More than 70 countries and regions, including American, Russian, South Africa, Iran,

Egypt, Indonesia, Chile, Philippine, Brazil, Uruguay

Company Overview：

The Zhejiang Geely holding group was founded in1986. It is among the top10 car

manufacturers in China. Geely entered the passenger car market in 1997. With continues

independent innovation, it progressed fast and has been ranked among the Chinese 500

Enterprise for 6 years. They received the honors as “the national innovation enterprise” and

the first state-level “the whole automobile Export-oriented enterprises”.

Products：

Geely has 4 sub-brands: Geely, Emgrand, Gleagle and Shanghai Englon. Geely has eight

series and more than 30 varieties of whole car products: Geely ZiYouJian、Geely Jingang、

Geely Vision、Shanghai Maple、Geely Meirenbao,etc. The products above are completely

through the national 3C authentication, and achieve the Europe III emission standard. Some of

the cars achieve the European IV standard, but cannot pas yet the Euro 5. Geely holds its

complete intellectual property rights.

Manufacturer bases：

The headquarter of the Geely holding group is in Hangzhou. It has six manufacturer bases

located in Linhai, Ningbo, Luqiao, Shanghai, Lanzhou and Xiangta, which enabled the group

to produce 300,000 vehicles every year.

Exports to：Russia, Ukraine and Middle East



Company Overview：

BYD officially entered the auto business by purchasing the Tsinchuan Automobile Company

Limited (now BYD Auto Company Limited). BYD Auto is a Chinese automobile

manufacturer established in 2003 in Shenzhen, Guangdong Province. BYD is the China leader

of both electric cars and rechargeable battery.

Products：

BYD’s auto products involves high-end, medium-end, and low-end cars and auto parts. Now,

BYD auto has grown up to be one of the most innovative brands in China. Its main car models

include F3,F3-R,F6,F8,DM EV, etc

Manufacturer bases：

BYD has production lines in Shenzhen, Shanghai, Xi’an and Beijing.

Exports to：

Portugal, Angola, Cape Verde, Kazakhstan, Russia, South America, Middle East.

Company Overview：

Great Wall Motor Company Limited is the first privately-owned auto company of China listed

in the Hong Kong Stock Market. Great Wall Company owns more than 20 subsidiaries with

over 18,000 employees.

In the domestic market, Great Wall Pickup has kept ranking No.1 in terms of sales volume

and market share for 9 consecutive years; and the Great Wall SUV has been the sales

champion for 4 consecutive years. Great Wall won the grand award of "The 2006 CCTV

Chinese Annual Best Independent Brand SUV". Although we have no data to verify it, it is

said that Great Wall Motor has had the largest sales volume and export turnover among all

Chinese auto brands from 2004 till 2006.

Products:

Its products cover Passenger Car, SUV, MPV and Pickup. At present, it has the production

capability of 400,000 units of whole vehicles, and the independent matching ability of the

core parts, such as engines, front and rear axles, etc.

Manufacturer base and R&D center: Great Wall Motor possesses only one production plant in Heibei Baoding. They also have one

R&D center with first class international R&D equipments and systems, being acclaimed as

"Postdoctoral Scientific Research Station", and owns a national certificated test center in

there.

It also owns testing center, Styling Department, Simulation Center, Dies Tooling Center.

Exports to：

South America Chile, Peru, Venezuela；Africa: Persian Gulf States such as Bahrain and

Saudi Arabia.



Company Overview：

Volkswagen has been active in China since 1984. Today, the group has 14 representative

companies in the country. Volkswagen was one of the first international automakers to

venture into China.

The VOLKSWAGEN Group has two joint ventures for the manufacture of automobiles in

China. The total investment of Volkswagen in China is more than six billion Euros from 1984

to 2005.

Products:

Santana, Santana 3000, Passat, Lingyu, Touran, Polo Jinqing, Polo Jinqu, CrossPolo,

Magotan, Sagitar, Golf, New BORA, BORA Classic, Jetta

Company Overview：

General Motors Corp., the world's largest automaker, has been the annual global industry

sales leader for 77 years. Founded in 1908, with global headquarters in Detroit, GM

manufactures its cars and trucks in 35 countries.

Established on June 12, 1997, Shanghai General Motors Co., Ltd. (Shanghai GM) is a 50-50

joint venture partnership between General Motors and Shanghai Automotive Industry Corp.

Group (SAIC), the China's largest passenger car manufacturers. Shanghai GM has adopted

GM's Global Manufacturing System (GMS), applying the five key principles of people

involvement, standardization, built-in quality, short lead times and continuous improvement

throughout the entire manufacturing process.

Products:

SGM Its sells vehicles under four major brands: Buick, Chevrolet, Cadillac and Saab. Its portfolio

includes the Buick Royaum premium sedan, Buick LaCrosse premium sedan, Buick Regal

upper-medium sedan, Buick Excelle lower-medium family, Buick GL8 executive wagon

family, Chevrolet Epica intermediate sedan, Chevrolet Lova small car, Chevrolet Aveo

hatchback, Chevrolet Sail small car family, Cadillac XLR luxury roadster, Cadillac SRX

medium luxury utility vehicle, Cadillac CTS luxury sedan, Cadillac SLS luxury business

sedan, Cadillac Escalade luxury utility, Saab 9-5 premium sedan, Saab 9-3 convertible and

Saab 9-3 sport sedan.

Manufacturer bases:

Shanghai GM operates vehicle manufacturing facilities in three Chinese cities. It has two

plants in Shanghai and one in Shenyang. Shanghai GM also has two powertrain facilities:

Jinqiao Powertrain in Shanghai and Shanghai GM Dong Yue Automotive Powertrain Co.,

Ltd. in Yantai. Shanghai GM has an annual manufacturing capacity of 480,000 vehicles,

which makes it one of the largest vehicle producers in China.

http://www.gm.com.cn/redirect.jsp?url=http://www.shanghaigm.com



Company Overview：

Ford is one of the leaders of the global automotive industry, its headquarter located in

Michigan, the products sells cover 6 continents with more than 200 countries and

regions .Ford has 245,000 employees, nearly 100 automotive assembly platform all over the

world. Ford holds brands: Ford、Lincoln、Mercury、Volvo Car and Mazda, etc. In addition,

Ford also developed Ford Credit business.

Ford signed the joint venture agreement with Chang’an Group in 2001 and the production

began in 2003.

Mazda entered in the Joint Venture in 2006, and the company was renamed as :”Chang’an

Ford Mazda Automobile Co. ,Ltd”. The equity is the following: Chang’an 50%,Ford

35%,Mazda15%.

Chang An Ford Mazda company is developing rapidly since 2006.

In March of 2007, the launch of S-MAX opened a whole new subdivide model SAV.

Products:

07 Ford Mondeo, Ford Focus, Ford S-MAX, Ford Mondeo Zhisheng, Mazda 3 and Volvo

S40.

Manufacture Base: The Chongqing manufacturing base of Chang’an Ford Mazda has an accumulate production

of 250,000 vehicles. Its second manufacturing base is located in Nanjing and began

production in 2007. It has an output of 160,000 vehicles.

Export to:

Algeria



Annex V. Export and import data of Passenger Cars

Data origin: The primary data original from China Main customs administration,

reorganized by DRC.

Note: Russia is included in Europe.

WORLDWIDE

EXPORTS2008 2007 2006 2005 2004 2003

Europe * 484,180 595,085 485,027 337,045 109,886 32,957

North America 291,377 650,375 621,758 474,413 165,527 43,176

South America 127,978 135,332 77,541 24,454 10,374 3,216

Asia * 103,284 110,651 102,207 47,522 19,976 7,733

Africa 63,581 72,064 78,535 44,845 19,169 3,448

Oceania 36,076 53,843 67,983 35,573 18,998 5,742

Worldwide 1,106,476 1,617,350 1,433,051 963,852 343,930 96,272

* Asia and Europe data do not correspond to the ones in the database but they have

been updated to include Turkey in Europe



EUROPE EXPORTS 2008 2007 2006 2005 2004 2003

Holland 76,410 24,731 29,432 20,314 4,802 2,249

Russia 70,128 74,455 32,508 4,173 389 31

Germany 66,842 107,119 66,192 30,954 11,858 2,369

Ukraine 58,577 43,793 6,721 3,578 185 22

UK 33,261 48,145 34,924 68,988 40,704 12,301

Italy + San Marino 30,154 43,548 72,622 18,283 2,913 1,453

Poland 27,943 20,404 4,936 2,655 658 26

France 15,253 43,258 60,541 37,132 9,839 3,318

Belgium 12,997 38,040 47,000 36,750 3,915 1,417

Spain 12,017 38,191 34,694 50,005 8,629 1,833

Sweden 9,914 21,363 23,200 17,656 7,523 2,345

Denmark 8,644 14,056 13,092 12,271 5,184 2,169

Finland 7,802 16,727 13,615 7,234 2,566 750

Turkey 7,730 1,703 4,055 1,693 1,091 50

Greece 6,096 5,991 3,264 1,493 1,013 72

Portugal 5,275 7,400 5,515 2,541 579 181

Romania 5,038 10,003 2,458 692 162 28

Czechsolvakia 3,740 3,716 2,704 1,370 421 132

Ireland 3,636 6,219 3,680 4,382 3,291 1,057

Norway 2,932 3,891 7,408 6,833 1,651 469

Austria 2,670 3,126 2,437 1,610 608 165

Hungary 2,467 3,993 4,519 2,420 772 290

Lithuania 2,117 1,985 673 73 51 19

Bulgaria 1,794 1,359 377 105 133 20

Switserland 1,613 3,072 2,144 851 50 133

Belarus 1,373 624 77 7

Slovenia 1,215 1,363 1,244 632 56 23

Estonia 1,180 1,200 982 355 121 5

Croatia 1,168 1,140 562 635 21 4

Latvia 1,068 2,278 1,004 144 67

Azerbaijan 734 429 325 93 14

Moldova 703 192 54 32 20

Georgia 477 394 388 60 5

Iceland 343 294 269 586 99 6

Bosnia-Herzegovina 297 80 23 116 24

Slovakia 210 143 155 189 169

Malta 101 192 436 39 13

Armenia 95 199 142 13

Serbia 80

Macedonia 30 63 140

Albania 27 74 158 31

Montenegro 26

Luxembourg 3 107 133 20 272

Yugoslavia 25 224 50 23 2

Total Europe * 484,180 595,085 485,027 337,045 109,886 32,957

* Europe data include Turkey



AFRICA EXPORTS 2008 2007 2006 2005 2004 2003

Egypt 18,661 9,025 6,368 3,569 1,150 14

Algeria 14,829 9,879 6,042 4,144 3,254 446

Morocco 2,637 2,368 1,139 551 102 2

Libya 240 710 4,337 592 277 593

Tunisia 142 301 247 336 20

Total North Africa 36,509 22,283 18,133 9,192 4,783 1,075

Total Africa 63,581 72,064 78,535 44,845 19,169 615

SOUTH AMERICA

EXPORTS2008 2007 2006 2005 2004 2003

Argentina 33,124 39,198 21,997 5,199 589 153

Chile 19,102 9,915 10,276 1,776 790 474

Mexico 13,924 17,541 13,912 7,433 4,898 1,837

Venezuela 12,424 28,874 10,045 911 79 11

Colombia 8,813 12,106 7,178 1,843 164 26

Brazil 7,338 4,454 947 400 95 13

Uruguay 5,992 2,406 1,251 460 116 12

Peru 5,945 2,058 569 103 15 100

Panama 4,942 3,814 1,932 758 405 31

Ecuador 4,895 5,836 3,010 1,197 786 278

Paraguay 2,544 2,487 463 107 120 17

Costa Rica 1,738 1,492 976 1,075 212 35

Cuba 1,696 314 1,137 255 13

Guatemala 1,108 1,476 1,375 1,248 1,305 161

Honduras 893 392 488 82 76 6

Puerto Rico 891 359 396 365 232 10

Salvador 862 752 109 26 6

Total South America 127,978 135,332 77,541 24,454 10,374 3,216

ASIA EXPORTS 2008 2007 2006 2005 2004 2003

United Arab

Emirates21,316 26,154 20,986 5,404 2,111 961

Japan 15,488 19,722 24,987 5,932 707 266

Syria 11,298 10,585 10,279 8,982 5,196 1,790

Turkey 7,730 1,703 4,055 1,693 1,091 50

Iran 6,552 1,622 452 352 167 18

Tajikistan 6,218 5,976 1,882 110 61 10

Saudi Arabia 5,900 9,469 6,691 7,388 2,269 549

South Korea 4,426 10,798 4,620 1,275 968 530

Lebanon 3,987 1,955 909 2,906 480 76

Philippines 3,154 1,772 967 1,112 284 116

Thailand 2,276 2,368 1,701 1,655 1,046 108

Kuwait 2,217 1,858 1,919 3,725 2,915 1,155

Bangladesh 2,129 194 186 37 119 233

Singapore 1,978 2,994 1,049 591 201 14

Indonesia 1,884 1,558 1,657 160 398 2

Malaysia 1,773 1,011 12,410 1,003 68 11

Total Asia* 103,284 110,651 102,207 47,522 19,976 7,733

* Turkey is excluded



WORLDWIDE

IMPORTS2008 2007 2006 2005 2004 2003

Asia * 212,570 149,019 98,291 83,507 98,953 89,023

Europe * 132,100 112,129 94,755 51,876 56,429 58,320

North America 48,862 38,686 26,376 16,018 7,584 7,147

South America 4,841 5,015 2,656 136 495 862

Oceania 2 3 11 5,999 114 9

Africa 1 220

worldwide 530,154 415,939 316,717 209,412 219,189 212,795

* Asia and Europe data do not correspond to the ones in the database but they have

been updated to include Turkey in Europe

EUROPE

IMPORTS2008 2007 2006 2005 2004 2003

Germany 76,798 70,968 65,622 33,733 41,824 44,008

UK 20,073 11,014 6,182 3,453 2,464 1,637

Slovakia 12,697 10,376 3,721 1,388 550 1,018

Sweden 6,153 6,598 5,292 5,301 3,772 4,136

Austria 5,493 4,002 4,897 1,211 2,441 816

Belgium 2,669 2,658 2,632 2,329 156 60

France 2,306 3,089 5,065 3,030 1,402 2,758

Hungary 1,686 961 3 8 33 51

Italy 1,347 452 268 225 83 177

Spain 1,159 464 416 790 180 99

Finland 674 396 186 57 3

Portugal 392 1 1 294 143

Turkey 321 1,043 127 815 1,106

Poland 240 1 46 1,548

Czecho-

slovakia77 33 323 321 2,307 500

Holland 10 70 16 23 3 10

Russia 2 4 53 4

Ireland 1

Norway 1 1

Ukraine 1

Romania 1 1 249

Switzerland 1 2 2

Slovenia 3 2

Total Europe 132,100 112,129 94,755 51,876 56,429 58,320

AFRICA

IMPORTS2008 2007 2006 2005 2004 2003

Algeria

Egypt 220

Libya

Morocco

Tunisia

Total Africa 0 1 0 0 0 220



ASIA IMPORTS 2008 2007 2006 2005 2004 2003

Japan 158,674 106,717 62,861 54,032 64,718 67,405

South Korea 50,887 42,130 35,183 29,271 33,779 16,853

Malaysia 2,907 2 2

Turkey 321 1,043 127 815 1,106

People's

Republic of

China

81 106 67 5 2 13

Total Asia * 212,570 149,019 98,291 83,507 98,953 89,023

* Turkey is excluded

SOUTH

AMERICA

IMPORTS

2008 2007 2006 2005 2004 2003

Mexico 4,841 5,015 2,646 131 486 824

Argentina 2 4 4 1

Brazil 1 1 5 37

Colombia 7

Total South

America4,841 5,015 2,656 136 495 862



Annex VI. Volume of imported passenger cars by origin, brand and

model

Origin Maker/Brand Model 2005 2006 2007 YTD Sep.2007 YTD Sep.2008 2005 2006 2007 2006 2007

Europe Alfa Romeo Romeo 6 4 7 7 1 0% 0% 0% -33% 75%

Alfa Romeo Total 6 4 7 7 1 0% 0% 0% -33% 75%

Aston Martin V8 Vantage 0 2 0% 0% 0% 0% 0%

DB9 1 1 0 2 0% 0% 0% -100% 0%

AstonMartin Total 1 1 0 4 0% 0% 0% -100% 0%

Audi Q7 644 5,856 4,036 5798 0% 1% 7% 0% 809%

A8 1,877 2,493 3,219 2,324 3,292 5% 5% 4% 33% 29%

TT 64 22 373 120 1160 0% 0% 0% -66% 1595%

A5 0 195 0% 0% 0% 0% 0%

S8 44 24 71 0% 0% 0% 0% 0%

R8 0 17 0% 0% 0% 0% 0%

Audi 7 128 109 14 0% 0% 0% -100% 0%

A6 133 32 21 13 8 0% 0% 0% -76% -34%

A4 92 22 5 4 1 0% 0% 0% -76% -77%

Audi Total 2,173 3,213 9,646 6,630 10,556 5% 6% 11% 48% 200%

Bentley ContinentalFlyingSpur 64 154 101 210 0% 0% 0% 0% 141%

Continental GT 29 20 38 24 52 0% 0% 0% -31% 90%

Arnage 29 26 23 18 34 0% 0% 0% -10% -12%

Bentley Total 58 110 215 143 296 0% 0% 0% 90% 95%

BMW X5 2,302 2,388 4,716 3,001 6,180 6% 5% 5% 4% 97%

730Li 3,240 3,805 6,730 5,094 4,666 8% 8% 8% 17% 77%

740Li 1,645 2,263 1,676 2,109 0% 3% 3% 0% 38%

X3 501 452 1,789 1,279 1,734 1% 1% 2% -10% 296%

330i 270 565 319 1,288 0% 1% 1% 0% 109%

750Li 573 1,097 1,001 759 922 1% 2% 1% 91% -9%

320i 4 1,024 1,543 1,256 581 0% 2% 2% 25500% 51%

325i 115 50 404 0% 0% 0% 0% 0%

120i 0 297 0% 0% 0% 0% 0%

760Li 263 333 302 234 281 1% 1% 0% 27% -9%

Z4 167 104 350 236 261 0% 0% 0% -38% 237%

130i 0 36 0% 0% 0% 0% 0%

M6 20 72 59 29 0% 0% 0% 0% 260%

M5 3 23 36 28 23 0% 0% 0% 667% 57%

650i 27 30 26 20 0% 0% 0% 0% 11%

BMW 75 19 5 4 10 0% 0% 0% -75% -74%

630i 15 52 125 109 8 0% 0% 0% 247% 140%

745Li 1,018 40 18 13 6 3% 0% 0% -96% -55%

530i 37 14 3 3 6 0% 0% 0% -62% -79%

550i 19 10 9 1 0% 0% 0% 0% -47%

645Ci 58 16 3 3 1 0% 0% 0% -72% -81%

325Ci 7 6 3 3 0% 0% 0% -14% -50%

750IL 1 0 0% 0% 0% -100% 0%

7 Series 7 1 0 0% 0% 0% -86% -100%

M3 2 5 0 0% 0% 0% 150% -100%

525i 4 2 2 0% 0% 0% 0% -50%

520i 13 11 2 2 0% 0% 0% -15% -82%

545i 74 10 2 0 0% 0% 0% -86% -80%

318Ci 16 6 2 2 0% 0% 0% -63% -67%

3 Series 4 1 0 0% 0% 0% -75% -100%

735Li 133 10 3 3 0% 0% 0% -92% -70%

Z3 2 1 0 0% 0% 0% -50% -100%

740i 688 0 2% 0% 0% -100% 0%

330Ci 34 7 1 0 0% 0% 0% -79% -86%

735i 1 0 0% 0% 0% -100% 0%

BMW Total 9,238 11,410 19,691 14,170 18,863 23% 23% 23% 24% 73%

Citroen C5 345 179 227 188 131 1% 0% 0% -48% 27%

C4 5 237 190 122 0% 0% 0% 0% 4640%

C6 1 53 43 30 0% 0% 0% 0% 5200%

Xsara 2 1 0 1 0% 0% 0% -100% 0%

Citoen 1 0 0% 0% 0% -100% 0%

Picasso 2 0 0% 0% 0% -100% 0%

Citroen Total 350 185 518 421 284 1% 0% 1% -47% 180%

Dacia Supernova 37 0 0% 0% 0% -100% 0%

Dacia Total 37 0 0% 0% 0% -100% 0%

Ferrari F430 10 62 126 83 102 0% 0% 0% 520% 103%

599 Gtb Fiorano 21 18 17 0% 0% 0% 0% 0%

612 Scaglietti 4 5 8 3 7 0% 0% 0% 25% 60%

430 Scuderia 0 3 0% 0% 0% 0% 0%

360 Modena 8 7 5 4 2 0% 0% 0% -13% -29%

Ferrari 1 1 1 0% 0% 0% -100% 0%

Ferrari Total 23 74 161 109 131 0% 0% 0% 222% 118%

Fiat Fiat 1 1 0% 0% 0% 0% 0%

Scudo 2 0 0% 0% 0% 0% -100%

Palio 1 4 0 0% 0% 0% 300% -100%

Fiat Total 1 6 1 1 0% 0% 0% 500% -83%

Jaguar XF 0 354 0% 0% 0% 0% 0%

XJ8 128 98 331 218 301 0% 0% 0% -23% 238%

S-Type 361 443 457 374 118 1% 1% 1% 23% 3%

XJ8L 13 5 27 0% 0% 0% 0% 0%

XJ6L 91 386 125 119 15 0% 1% 0% 324% -68%

XK 3 22 17 8 0% 0% 0% 0% 633%

Jaguar 2 0 2 0% 0% 0% 0% -100%

S-Type Sport 1 1 0 0% 0% 0% 0% -100%

X-Type 14 8 4 4 0% 0% 0% -43% -50%

Super 1 0 0% 0% 0% 0% -100%

Jaguar Total 595 942 952 737 825 1% 2% 1% 58% 1%

Lamborghini Spyder 4 2 5 3 17 0% 0% 0% -50% 150%

Murcielago 9 3 9 0% 0% 0% 0% 0%

LAMBORGHINI 2 1 0 0% 0% 0% -50% -100%

Lamborghini Total 6 3 14 6 26 0% 0% 0% -50% 367%

Lancia Thesis 1 0 1 0% 0% 0% 0% -100%

Lancia Total 1 0 1 0% 0% 0% 0% -100%

Land Rover Freelander-2 1,728 1,057 3,892 0% 0% 2% 0% 0%

Discovery-3 372 1,356 1,963 1,344 2,489 1% 3% 2% 265% 45%

Range Rover 324 618 1,188 817 1,845 1% 1% 1% 91% 92%

Range Rover Sport 85 296 602 393 699 0% 1% 1% 248% 103%

Defender 3 2 2 1 3 0% 0% 0% -33% 0%

China:Registration volume of imported passenger cars by origin,brand, and model(2005-2007,YTD Sep.2007/2008)

GrowthPercentage



Discovery-2 45 7 6 3 2 0% 0% 0% -84% -14%

Freelander 660 379 12 11 2 2% 1% 0% -43% -97%

Land Rover Total 1,489 2,658 5,501 3,626 8,932 4% 5% 6% 79% 107%

Lotus RCR 0 253 0% 0% 0% 0% 0%

Lotus 2 6 0 2 0% 0% 0% 200% -100%

Lotus Total 2 6 0 255 0% 0% 0% 200% -100%

Maserati Quattroporte 38 38 125 82 153 0% 0% 0% 0% 229%

Maserati 0 89 0% 0% 0% 0% 0%

Quattroporte Sport 28 51 45 5 0% 0% 0% 0% 82%

M138 Spyder 2 1 6 6 1 0% 0% 0% -50% 500%

M128 GT 1 0 0% 0% 0% 0% -100%

GranSport 1 4 6 6 0% 0% 0% 300% 50%

Maserati Total 41 72 188 139 248 0% 0% 0% 76% 161%

Maybach Maybach 62 6 19 19 14 9 0% 0% 0% 217% 0%

Maybach 62S 3 1 6 0% 0% 0% 0% 0%

Maybach 57 1 1 0 1 0% 0% 0% 0% -100%

Maybach Total 7 20 22 15 16 0% 0% 0% 186% 10%

Mercedes-Benz S350 3,621 4,451 5,208 4,097 5,711 9% 9% 6% 23% 17%

ML350 686 1,775 3,005 2,206 2,762 2% 4% 3% 159% 69%

S300 14 2,658 2,029 2,743 0% 0% 3% 0% 18886%

R350 87 1,147 777 1,592 0% 0% 1% 0% 1218%

GL450 26 1,109 725 1,288 0% 0% 1% 0% 4165%

S600 470 497 1,230 823 1,264 1% 1% 1% 6% 147%

C200K 602 8 1,127 0% 0% 1% 0% 0%

S500 639 993 1,072 835 1,123 2% 2% 1% 55% 8%

CLK280 71 316 423 289 494 0% 1% 0% 345% 34%

CLS350 331 375 548 382 462 1% 1% 1% 13% 46%

CLK200 25 74 247 154 390 0% 0% 0% 196% 234%

SLK200 365 305 398 307 377 1% 1% 0% -16% 30%

R500 15 286 209 341 0% 0% 0% 0% 1807%

R300 0 277 0% 0% 0% 0% 0%

Viano 0 267 0% 0% 0% 0% 0%

SLK280 6 84 228 154 248 0% 0% 0% 1300% 171%

GL550 0 190 0% 0% 0% 0% 0%

G55 11 6 95 64 185 0% 0% 0% -45% 1483%

ML63 89 62 124 0% 0% 0% 0% 0%

Mercedes-Benz 0 113 0% 0% 0% 0% 0%

C230 27 314 536 517 107 0% 1% 1% 1063% 71%

S65 2 45 26 102 0% 0% 0% 0% 2150%

SL350 52 73 118 100 92 0% 0% 0% 40% 62%

SLK350 142 121 121 88 83 0% 0% 0% -15% 0%

CLK240 229 83 78 64 74 1% 0% 0% -64% -6%

CLS500 81 101 125 83 71 0% 0% 0% 25% 24%

ML500 29 323 367 270 58 0% 1% 0% 1014% 14%

E63 1 32 18 39 0% 0% 0% 0% 3100%

CLK350 11 39 58 37 35 0% 0% 0% 255% 49%

C200K 203 807 1090 1,039 18 1% 2% 1% 298% 35%

SL500 27 35 36 30 18 0% 0% 0% 30% 3%

E200 194 18 14 9 18 0% 0% 0% -91% -22%

G500 16 18 36 28 16 0% 0% 0% 13% 100%

Sprinter313 0 9 0% 0% 0% 0% 0%

A170 12 4 11 8 5 0% 0% 0% -67% 175%

E240 1,960 296 52 45 5 5% 1% 0% -85% -82%

Vito 0 2 0% 0% 0% 0% 0%

S320 19 4 2 1 1 0% 0% 0% -79% -50%

SL55 12 5 2 1 1 0% 0% 0% -58% -60%

S430 2 1 3 2 1 0% 0% 0% -50% 200%

CL600 1 1 0 1 0% 0% 0% 0% -100%

MB100 0 1 0% 0% 0% 0% 0%

S280 945 53 4 3 1 2% 0% 0% -94% -92%

C280 1 0 1 0% 0% 0% -100% 0%

C220 22 4 4 4 1 0% 0% 0% -82% 0%

SL65 1 1 1 0% 0% 0% 0% 0%

C180 2 0 0% 0% 0% -100% 0%

CLK55 1 3 0 0% 0% 0% 200% -100%

E320 40 5 9 9 0% 0% 0% -88% 80%

300E 2 0 0% 0% 0% -100% 0%

260E 1 3 0 0% 0% 0% 200% -100%

SLK230 3 0 0% 0% 0% -100% 0%

C55 1 0 0% 0% 0% -100% 0%

CLK320 1 0 0% 0% 0% -100% 0%

S420 1 0 0% 0% 0% -100% 0%

SL430 7 5 2 2 0% 0% 0% -29% -60%

E350 32 129 6 5 0% 0% 0% 303% -95%

ML430 2 0 0% 0% 0% -100% 0%

Mercedes-Benz 36 15 27 13 0% 0% 0% -58% 80%

E500 5 1 10 10 0% 0% 0% -80% 900%

S55 15 1 1 0% 0% 0% -100% 0%

E55 15 13 1 1 0% 0% 0% -13% -92%

A160 9 2 1 1 0% 0% 0% -78% -50%

CLS 4 3 1 1 0% 0% 0% -25% -67%

E430 2 0 0% 0% 0% -100% 0%

C240 21 21 2 2 0% 0% 0% 0% -90%

SL320 1 0 0% 0% 0% -100% 0%

ML320 5 2 0 0% 0% 0% -60% -100%

Mercedes-Benz Total 10,416 11,524 21,140 15,540 21,775 26% 23% 25% 11% 83%

MG MG 0 160 0% 0% 0% 0% 0%

MG Total 0 160 0% 0% 0% 0% 0%

MINI MINI 441 875 2,184 1,511 1,909 1% 2% 3% 98% 150%

Clubman 0 145 0% 0% 0% 0% 0%

MINI Total 441 875 2,184 1,511 2,054 1% 2% 3% 98% 150%

Ople Astra 744 1,829 1,971 1,536 923 2% 4% 2% 146% 8%

Zafira 307 136 692 535 404 1% 0% 1% -56% 409%

Vectra 1,374 1,211 726 609 254 3% 2% 1% -12% -40%

Astra GTC 1 0 30 0% 0% 0% 0% -100%

Omega 23 2 3 3 0% 0% 0% -91% 50%

Agila 47 7 3 3 0% 0% 0% -85% -57%

Opel Total 2,495 3,186 3,395 2,686 1,611 6% 6% 4% 28% 7%

Peugeot 307SW 80 23 37 5 162 0% 0% 0% -71% 61%

307CC 169 149 201 153 106 0% 0% 0% -12% 35%



206CC 215 229 311 245 95 1% 0% 0% 7% 36%

Peugeot 293 360 197 153 81 1% 1% 0% 23% -45%

407SW 2 17 60 44 32 0% 0% 0% 750% 253%

COUPE 407 5 57 35 29 0% 0% 0% 0% 1040%

407 0 16 0% 0% 0% 0% 0%

607 0 11 0% 0% 0% 0% 0%

206 5 0 0% 0% 0% 0% -100%

307 20 4 1 1 0% 0% 0% -80% -75%

Peugeot Total 779 792 864 636 532 2% 2% 1% 2% 9%

Porsche Cayenne 906 1,338 2,694 1,797 3,630 2% 3% 3% 48% 101%

Cayenne S 780 1,186 768 1,392 0% 2% 1% 0% 52%

Cayenne Turbo 315 364 249 630 0% 1% 0% 0% 16%

Cayenne GTS 0 274 0% 0% 0% 0% 0%

Brigand 97 115 149 123 224 0% 0% 0% 19% 30%

Cayman 18 107 84 163 0% 0% 0% 0% 494%

911 Carrera S 1 54 96 79 99 0% 0% 0% 5300% 78%

911 Turbo 1 11 54 33 58 0% 0% 0% 1000% 391%

911 Carrera 4 71 26 50 40 55 0% 0% 0% -63% 92%

Cayman S 54 48 38 53 0% 0% 0% 0% -11%

911 Carrera 19 47 35 25 37 0% 0% 0% 147% -26%

911 Carrera 4S 2 33 28 33 0% 0% 0% 0% 1550%

911 Targa 2 33 21 30 0% 0% 0% -100% 0%

911 Gt3 1 5 2 6 0% 0% 0% 0% 400%

Porsche Total 1,097 2,761 4,854 3,287 6,684 3% 5% 6% 152% 76%

Renault Megane 615 1,961 1,398 1,202 374 2% 4% 2% 219% -29%

Scenic 753 851 635 515 245 2% 2% 1% 13% -25%

MeganeCC 9 59 227 188 78 0% 0% 0% 556% 285%

Laguna 93 129 196 149 53 0% 0% 0% 39% 52%

Vel Satis 25 23 7 7 0% 0% 0% -8% -70%

Scenic RX4 92 19 2 2 0% 0% 0% -79% -89%

Renault Total 1,587 3,042 2,465 2,063 750 4% 6% 3% 92% -19%

Rolls-Royce Phantom 22 34 72 50 60 0% 0% 0% 55% 112%

Rolls-Royce 3 0 1 0% 0% 0% -100% 0%

Rolls-Royce Total 25 34 72 50 61 0% 0% 0% 36% 112%

Rover Rover 6 12 27 24 12 0% 0% 0% 100% 125%

Rover 75 100 32 78 65 6 0% 0% 0% -68% 144%

Rover total 106 44 105 89 18 0% 0% 0% -58% 139%

Saab Saab 213 279 501 327 347 1% 1% 1% 31% 80%

93 0 165 0% 0% 0% 0% 0%

95 0 28 0% 0% 0% 0% 0%

9-3 Sporthatch 1 29 25 21 0% 0% 0% 0% 2800%

Saab Total 213 280 530 352 561 1% 1% 1% 31% 89%

Skoda Octavia 715 209 83 70 37 2% 0% 0% -71% -60%

Superb 420 421 71 62 14 1% 1% 0% 0% -83%

Fabia 13 4 2 2 0% 0% 0% -69% -50%

Skoda Total 1,148 634 156 134 51 3% 1% 0% -45% -75%

SMART Fortwo 8 2 2 0% 0% 0% -100% 0%

City Coupe 1 0 0% 0% 0% -100% 0%

SMART Total 9 2 2 0% 0% 0% -100% 0%

Spyder C8 2 0 0% 0% 0% 0% -100%

Spyder Total 2 0 0% 0% 0% 0% -100%

Volvo S80 2,843 1,668 2,859 2,168 2,175 7% 3% 3% -41% 71%

XC90 1,076 1,536 2,070 1,619 1,580 3% 3% 2% 43% 35%

Volvo 151 130 566 324 1,049 0% 0% 1% -14% 335%

C30 0 347 0% 0% 0% 0% 0%

C70 1 5 241 168 269 0% 0% 0% 400% 4720%

S40 1,307 968 43 38 5 3% 2% 0% -26% -96%

XC70 1 0 0% 0% 0% -100% 0%

S60 21 2 1 1 0% 0% 0% -90% -50%

Volvo Total 5,400 4,309 5,780 4,318 5,425 13% 9% 7% -20% 34%

Volkswagen The Touareg 1,076 2,062 2,836 2,046 3,331 3% 4% 3% 92% 38%

Beetle 928 1,848 3,214 2,370 2,790 2% 4% 4% 99% 74%

Magotan 558 357 696 0% 0% 1% 0% 0%

Phaeton 156 380 546 447 660 0% 1% 1% 144% 44%

GTI 31 302 235 204 0% 0% 0% 0% 874%

EOS 0 21 0% 0% 0% 0% 0%

Sharan 192 43 4 3 4 0% 0% 0% -78% -91%

Golf 22 5 5 5 0% 0% 0% -77% 0%

Passat 27 8 4 3 0% 0% 0% -70% -50%

Volkswagen Total 2,401 4,377 7,469 5,466 7,706 6% 9% 9% 82% 71%

Adjusted European Total 40,144 50,564 85,933 62,138 87,826 100% 100% 100%

Source: Fourin (Research and Analysis of the Asian Automotive Industry)



Annex VII. Volume of top 30 imported passenger cars models in top

5 provinces

Ranking Top Five Administrative UnitsVolume Ranking Top Five Administrative UnitsVolume

2005 0.0% 1 Zhejiang 3421 24.8% 1 Zhejiang 3699 24.7%

2006 2961 2.4% 2 Guangdong 3124 22.6% 2 Guangdong 2723 18.2%

2007 13800 6.5% 3 Jiangsu 1254 9.1% 3 Jiangsu 1358 9.1%

YTD Sep.2007 10067 6.5% 4 Shanghai 1006 7.3% 4 Beijing 1008 6.7%

YTD Sep.2008 15001 6.9% 5 Beijing 813 5.9% 5 Shanghai 1003 6.7%

2005 7747 6.9% 1 Zhejiang 1666 13.8% 1 Zhejiang 1542 14.7%

2006 10891 8.7% 2 Guangdong 1110 9.2% 2 Beijing 1043 9.9%

2007 12083 5.7% 3 Liaoning 1001 8.3% 3 Liaoning 815 7.8%

YTD Sep.2007 9010 5.8% 4 Beijing 996 8.2% 4 Inner Mongolia 805 7.7%

YTD Sep.2008 10493 4.9% 5 Inner Mongolia 916 7.6% 5 Guangdong 616 5.9%


2006 8831 7.1% 2 Yunnan 1448 12.0% 2 Yunnan 1236 12.5%

2007 12054 5.7% 3 Shaanxi 896 7.4% 3 Shaanxi 604 6.1%

YTD Sep.2007 8938 5.8% 4 Inner Mongolia 862 7.2% 4 Inner Mongolia 589 5.9%

YTD Sep.2008 9917 4.6% 5 Shanxi 622 5.2% 5 Shanxi 568 5.7%


2006 2749 2.2% 2 Liaoning 526 9.8% 2 Beijing 656 8.4%

2007 5373 2.5% 3 Shanxi 434 8.1% 3 Zhejiang 619 7.9%

YTD Sep.2007 3939 2.5% 4 Beijing 430 8.0% 4 Liaoning 589 7.5%

YTD Sep.2008 7813 3.6% 5 Zhejiang 319 5.9% 5 Shanxi 470 6.0%

2005 0.0% 1 Guangdong 1133 18.8% 1 Zhejiang 938 13.2%

2006 0.0% 2 Zhejiang 826 13.7% 2 Guangdong 842 11.9%

2007 6025 2.9% 3 Beijing 593 9.8% 3 Beijing 799 11.3%

YTD Sep.2007 4267 2.8% 4 Yunnan 285 4.7% 4 Shandong 426 6.0%

YTD Sep.2008 7099 3.3% 5 Shandong 212 3.5% 5 Yunnan 398 5.6%



2007 4716 2.2% 3 Beijing 603 12.8% 3 Beijing 769 12.4%

YTD Sep.2007 3001 1.9% 4 Shanghai 390 8.3% 4 Shanghai 447 7.2%

YTD Sep.2008 6180 2.9% 5 Jiangsu 330 7.0% 5 Jiangsu 364 5.9%

2005 0.0% 1 Guangdong 711 25.7% 1 Guangdong 1400 23.3%


2007 2770 1.3% 3 Beijing 232 8.4% 3 Beijing 445 7.4%

YTD Sep.2007 1058 0.7% 4 Liaoning 170 6.1% 4 Liaoning 337 5.6%

YTD Sep.2008 6015 2.8% 5 Shandong 132 4.8% 5 Shandong 307 5.1%

2005 0.0% 1 Jiangsu 33 12.9% 1 Beijing 575 9.7%

2006 0.0% 2 Guangdong 25 9.8% 2 Shandong 491 8.3%

2007 255 0.1% 3 Zhejiang 21 8.2% 3 Jiangsu 426 7.2%

YTD Sep.2007 12 0.0% 4 Beijing 20 7.8% 4 Guangdong 418 7.0%

YTD Sep.2008 5930 2.7% 5 Shandong 19 7.5% 5 Zhejiang 418 7.0%


2006 644 0.5% 2 Beijing 565 9.6% 2 Beijing 634 10.9%

2007 5856 2.8% 3 Liaoning 563 9.6% 3 Guangdong 574 9.9%

YTD Sep.2007 4036 2.6% 4 Guangdong 546 9.3% 4 Liaoning 517 8.9%


2005 3621 3.2% 1 Guangdong 996 19.1% 1 Zhejiang 1110 19.4%

2006 4451 3.6% 2 Zhejiang 924 17.7% 2 Guangdong 829 14.5%

2007 5208 2.5% 3 Beijing 502 9.6% 3 Beijing 637 11.2%



2005 0.0% 1 1 Guangdong 810 15.5%

2006 0.0% 2 2 Zhejiang 707 13.5%

2007 0.0% 3 3 Beijing 583 11.1%

YTD Sep.2007 0.0% 4 4 Jiangsu 470 9.0%

YTD Sep.2008 5236 2.4% 5 5 Shandong 265 5.1%



2007 6730 3.2% 3 Beijing 554 8.2% 3 Beijing 471 10.1%





2007 137 0.1% 3 Jiangsu 17 12.4% 3 Beijing 364 8.1%

YTD Sep.2007 7 0.0% 4 Shandong 17 12.4% 4 Jiangsu 319 7.1%

YTD Sep.2008 4489 2.1% 5 Beijing 0.0% 5 Shandong 280 6.2%


2006 2761 2.2% 2 Zhejiang 380 9.2% 2 Shandong 524 12.2%

2007 4124 2.0% 3 Shanghai 258 6.3% 3 Zhejiang 243 5.6%

YTD Sep.2007 2958 1.9% 4 Shandong 211 5.1% 4 Shanghai 207 4.8%

YTD Sep.2008 4310 2.0% 5 Beijing 158 3.8% 5 Beijing 184 4.3%

2005 0.0% 1 Beijing 328 19.0% 1 Beijing 717 18.4%

2006 0.0% 2 Guangdong 299 17.3% 2 Zhejiang 460 11.8%




China:Resgistration Volume of Top 30 Imported Passenger Models in Top Five Administrative Units(2005-2--7,YTD Sep.2007/2008)

Ranking Origin Brand Segment/Model Year Volume

(Component

Ratio)

(component

Ratio）(Component

Ratio)2007 YTD Sep.2008

ES350X

S Santa Fe

SLand Cruiser

Prado

S Forester

SOutlander

EX

S

S

S

X5

Highlander

Captiva

S Q7

X S350

C

X

M

L

S

Mazda 3

730Li

Mazda 5

Carens

Freelander-2

LexusJP1

2 KR Hyundai

Toyota

Subaru

Hyundai

BMW

Toyota

Chevrolet

Audi

Mercedes-Benz

Mazda

BMW

Mazda

Kia

Land Rover

JP

JP

JP

EU

JP

US

EU

EU

JP

EU

JP

KR

EU

3

4

5

6

7

8

9

10

11

12

13

14

15





2007 5457 2.6% 3 Jiangsu 483 8.9% 3 Jiangsu 404 10.5%

YTD Sep.2007 4144 2.7% 4 Shanghai 318 5.8% 4 Beijing 309 8.0%




2007 2694 1.3% 3 Beijing 206 7.6% 3 Beijing 382 10.5%

YTD Sep.2007 1797 1.2% 4 Shanghai 181 6.7% 4 Liaoning 279 7.7%

YTD Sep.2008 3630 1.7% 5 Liaoning 147 5.5% 5 Shanghai 267 7.4%


2006 1369 1.1% 2 Zhejiang 622 12.2% 2 Liaoning 389 10.8%

2007 5085 2.4% 3 Liaoning 480 9.4% 3 Zhejiang 362 10.0%


YTD Sep.2008 3612 1.7% 5 Shanxi 228 4.5% 5 Shanxi 192 5.3%

2005 1076 1.0% 1 Beijing 352 12.4% 1 Beijing 431 12.9%


2007 2836 1.3% 3 Shichuan 218 7.7% 3 Shichuan 342 10.3%

YTD Sep.2007 2046 1.3% 4 Zhejiang 211 7.4% 4 Zhejiang 247 7.4%

YTD Sep.2008 3331 1.5% 5 Shandong 151 5.3% 5 Shandong 199 6.0%

2005 1877 1.7% 1 Beijing 674 20.9% 1 Beijing 695 21.1%


2007 3219 1.5% 3 Jiangsu 243 7.5% 3 Shandong 288 8.7%

YTD Sep.2007 2324 1.5% 4 Shandong 236 7.3% 4 Jiangsu 262 8.0%




2007 3215 1.5% 3 Shanghai 327 10.2% 3 Jiangsu 311 10.2%

YTD Sep.2007 2362 1.5% 4 Jiangsu 323 10.0% 4 Shanghai 299 9.8%


2005 928 0.8% 1 Beijing 510 15.9% 1 Beijing 490 17.6%







2007 3005 1.4% 3 Beijing 305 10.1% 3 Beijing 290 10.5%





2007 2658 1.3% 3 Beijing 225 8.5% 3 Beijing 310 11.3%



2005 0.0% 1 Guangdong 323 14.0% 1 Beijing 318 12.1%

2006 0.0% 2 Beijing 234 10.2% 2 Inner Mongolia 202 7.7%



YTD Sep.2008 2625 1.2% 5 Inner Mongolia 150 6.5% 5 Guangdong 177 6.7%

2005 372 0.3% 1 Guangdong 306 15.6% 1 Beijing 338 13.6%

2006 1356 1.1% 2 Beijing 203 10.3% 2 Guangdong 288 11.6%


YTD Sep.2007 1344 0.9% 4 Shichuan 120 6.1% 4 Liaoning 194 7.8%

YTD Sep.2008 2489 1.2% 5 Liaoning 116 5.9% 5 Shichuan 126 5.1%

2005 2843 2.5% 1 Zhejiang 375 13.1% 1 Beijing 326 15.0%

2006 1668 1.3% 2 Beijing 370 12.9% 2 Zhejiang 279 12.8%

2007 2859 1.4% 3 Jiangsu 325 11.4% 3 Jiangsu 201 9.2%

YTD Sep.2007 2168 1.4% 4 Guangdong 290 10.1% 4 Shanghai 186 8.6%

YTD Sep.2008 2175 1.0% 5 Shanghai 205 7.2% 5 Guangdong 173 8.0%



2007 2263 1.1% 3 Shanghai 214 9.5% 3 Beijing 211 10.0%




2006 4078 3.3% 2 Guangdong 516 14.7% 2 Jiangsu 214 10.8%

2007 3519 1.7% 3 Jiangsu 404 11.5% 3 Guangdong 203 10.3%



2005 441 0.4% 1 Beijing 439 20.1% 1 Beijing 383 20.1%


2007 2184 1.0% 3 Shanghai 294 13.5% 3 Shanghai 203 10.6%

YTD Sep.2007 1511 1.0% 4 Guangdong 292 13.4% 4 Guangdong 202 10.6%


2005 66732 59.3%

2006 61838 49.5%

2007 83933 39.7%

YTD Sep.2007 63165 40.8%

YTD Sep.2008 71107 32.9%

2005 112486 100.0%

2006 124912 100.0%

2007 211265 100.0%

YTD Sep.2007 154729 100.0%

YTD Sep.2008 215990 100.0%

M

S

Previa

Cayenne

Toyota

Porsche

Toyota

Volkswagen

Audi

Lexus

Volkswagen

BMW

Hyundai

MINI

Mercedes-Benz

Mercedes-Benz

Hyundai

Land Rover

Volvo

JP

EU

16

17

JP

EU

EU

JP

EU

EU

EU

KR

EU

EU

EU

KR

EU

Other

Total

18

19

20

21

22

23

24

25

26

27

28

29

30

S

S

X

X

L

S

X

S

S

X

X

L

X

RAV-4

Touareg

A8

IS300

Beetle

ML350

S300

Veracruz

Discovery-3

S80

740Li

Coupe

MINI



Annex VIII. Comparison of data from different sources of

information

Customs (8703) Fourin(CAAM) CEIC（CAAM） Automarket Eurostat (8703)

Car 188,638

SUV 25,671

Minibus 43,210

Other 6,982

Total 1,617,350 246,025 257,519 264,501

Export to Spain 38,191 35,106

Export to Europe27 465,105 392,763

Customs (8703) Fourin(CAAM) CEIC（CAAM） Automarket Eurostat (8703)

Export 2,102,778 614,412 612,380

Export to Spain 38,318

Export to Europe27 472,599

Automotive 2007－China

OptionsDatabase

Passenger Car 2007－China

DatabaseOptions

Export

National Bureau of Statistics of ChinaFourin CEIC Automarket

Car 93,315

SUV 7,984

Minibus 14,168

Other 10,877

Total 119,394 115,467 126,344

Passenger Car 2006-China

Options

Export

Customs (8703) Fourin CEIC Automarket

Car 31,124

SUV 1,844

Minibus 5,844

Other 8,373

Total 963,852 42,881 38,785 47,185

Passenger Car 2005-China

OptionsDatabase

Export



Annex IX. Overview of the main RoRo terminals in China

Type Terminal Share holders-(CN) Share holders(EN) In short(En) Share(%)

广州港集团有限公司 Guangzhou Port Group GZ Port

广州汽车工业集团有限公司 Guangzhou Automobile Industry Group Co., Ltd GAIG

广州南沙资产经营有限公司 Guangzhou Nansha Assets Operation Co., Ltd. GNAO

日本邮船株式会社 NYK NYK

株式会社商船三井 Mitsui O.S.K. Lines MOL

大连港集团有限公司 PDA Corporation PDA 40

中远太平洋有限公司 COSCO Pacific LTD COSCOPAC 30

日本邮船株式会社 NYK NYK 30

上海国际港务（集团）股份有限公司 Shanghai International Port Group SIPG 40

上海汽车工业销售有限公司 Shanghai Automobile Industry Co.,LTD. SAIC 35


华轮威尔森瑞典中区码头公司 Wallenius Wilhelmsen Logistics WWL 5

上海汽车工业香港有限公司 Shanghai Automotive Industry Co.,LTD. Hong Kong SAIC (H.K.) 5


挪威华轮-威尔森码头北方有限公司 Wallenius Wilhelmsen Logistics WWL 15

天津港股份有限公司 Tianjin Port holdings Tianjin Port 51

武汉港沌口商品汽车滚装码头武汉港务集团有限公司 Wuhan Port Group Co., Ltd. Wuhan Port Group 100

奇瑞汽车滚装码头有限公司奇瑞汽车股份有限公司 Chery 100

1.重庆码头 Chongqin

2.涪陵码头 Fuling

3.万州码头 Wanzhou 重庆港务集团有限公司 Chongqin Port Group Co.,Ltd CQG 100

RoRo

天津港环球滚装码头有限公司

Tianjin Port roro terminal Co.Ltd.

广州港南沙汽车码头有限公司

Guangzhou Port Nansha Automotive

terminal Co. Ltd.

Main RoRo Terminals in China

大连汽车码头

Port of Dalian Automotive Terminal

Co. Ltd.

上海海通国际汽车码头有限公司

Shanghai Haitong International

automotive terminal Co. Ltd.



Annex X. Homologation in EC (EWVTA) (list of Applicable

directives)

REFERENCE TITLE DESCRIPTION

70/221/EEC FUEL TANKS High pressure, fire stability, temperature endurance, mechanical strength

70/221/EEC REAR UNDERRUN PROTECTION Geometrical compliance

70/387/EEC DOORS, LATCHES AND HINGES Static strength, dynamic resistance

74/60/EEC INTERIOR FITTINGS Design specifications, energy absorption capability

74/297/EEC BEHAVIOUR OF STEERING COLUMN Design specifications, crash capability

74/408/EEC SEAT STRENGH Seat back static strength, anchorages static strength, anchorages dynamic strength

74/483/EEC EXTERNAL PROJECTIONS Design specifications

76/115/EEC SEAT-BELT ANCHORAGES Design specifications, installation requirements, static strength

77/389/EEC TOWING DEVICES Design specifications, static strength

77/541/EEC SEAT-BELT INSTALLATION Design specifications, installation requirements

78/932/EEC HEAD RESTRAINT Design specifications, installation requirements, static strength

96/79/EEC HEAD ON COLLISION Biomechanical (dummies) requirements, crash capability

96/27/EC SIDE COLLISION Biomechanical (dummies) requirements, crash capability

2003/102/EEC PEDESTRIAN PROTECTION Biomechanical (dummies) requirements, energy absorption capability


70/157/EEC SOUND LEVEL Standby test, pass by test

70/220/EEC EMISSIONS (Gasoline& diesel) Pollutant (CO, HC, NOx, particles) emissions requirements in different test cycles and conditions

72/245/EEC EMC Electromagnetic emissions, immunity

72/306/EEC DIESEL SMOKE Smoke opacity requirement

80/1268/EEC CO2 & FUEL CONSUMPTION CO2 emission requirements, fuel consumption control

80/1269/EEC POWER Power control

List of applicable Directives related to passive safety:

List of applicable Directivesrelated to powertrain:


70/311/EEC STEERING EFFORT Wheel turn effort requirements, drivability specifications

70/388/EEC AUDIBLE WARNING DEVICES INSTALLATION Sound level requirements, component specifications

71/127/EEC REAR-VIEW MIRROR INSTALLATION Field of view requirements, component specifications

71/320/EEC BRAKE SYSTEM Performance requirements under different driving conditions, component specifications

75/443/EEC SPEEDOMETER AND REVERSE GEAR Accuracy requirements, presence

76/756/EEC LIGHTING INSTALLATION Installation requirements, component specifications, presence

77/649/EEC FIELD OF VIEW Geometrical requirements

78/317/EEC DEFROST AND DEMIST Performance requirements

78/318/EEC WIPER AND WASHER Performance requirements, component specifications

78/548/EEC HEATING SYSTEMS (M1) Presence

78/549/EEC WHEEL GUARDS Geometrical requirements

92/22/EEC SAFETY GLAZING INSTALLATION Installation requirements, component specifications

92/23/EEC TYRE INSTALLATION Installation requirements, component specifications

List of applicable Directivesrelated to active safety:




70/156/EEC EWVTA Addition of all separate Directives

70/222/EEC REAR REGISTRATION PLATES Geometrical specifications

74/61/EEC UNAUTHORISED USE Design specifications, strength requirements, presence

76/114/EEC STATUTORY PLATES AND INSCRIPTIONS Design specifications, presence

78/316/EEC IDENTIFICATION OF CONTROLS Design specifications, presence

92/21/EEC MASSES AND DIMENSIONS, M1 Design specifications


77/541/EEC SEAT-BELTS Strength requirements after different preconditioning

76/757/EEC RETRO-REFLECTOR Durability requirements, geometrical specifications, reflection capability

76/758/EEC FRONT POSITION LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

76/758/EEC REAR POSITION LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

76/758/EEC STOP LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

76/759/EEC DIRECTION-INDICATOR LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

76/760/EEC REAR REGISTRATION PLATE LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

76/761/EEC HEADLAMP (INCLUDING BULBS) Durability requirements, geometrical specifications, color specifications, intensity specifications

76/762/EEC FRONT FOG LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

77/538/EEC REAR FOG LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

77/539/EEC REVERSING LAMP Durability requirements, geometrical specifications, color specifications, intensity specifications

70/388/EEC HORN, M1 Durability requirements, sound pressure requirements

71/127/EEC REAR-VIEW MIRRORS Durability requirements, geometrical specifications, strength requirements, reflection capability

92/23/EEC TYRES strength requirements, reflection capability

92/22/EEC GLAZING Strength requirements, construction specifications

94/20/EEC COUPLING DEVICES Strength requirements, design specifications

List of applicable Directives related to components:

List of applicable Directivesrelated to whole vehicle:

Comments:

European emission standards define the acceptable limits for exhaust emissions of

new vehicles sold in EU member states. The emission standards are defined in a

series of European Union directives staging the progressive introduction of

increasingly stringent standards.

Currently, emissions of nitrogen oxide (NOx), hydrocarbons (HC), carbon monoxide

(CO) and particulate matter (PM) are regulated for most vehicle types, including cars,

lorries, trains, tractors and similar machinery, barges, but excluding seagoing ships

and airplanes. For each vehicle type, different standards apply. Compliance is

determined by running the engine at a standardized test cycle. Non-compliant

vehicles cannot be sold in the EU32,

but new standards do not apply to vehicles

already on the roads. No use of specific technologies is mandated to meet the

standards, though available technology is considered when setting the standards. New

models introduced must meet current or planned standards, but minor lifecycle model

revisions may continue to be offered with pre-compliant engines.

32 We do not know if Brilliance that is being sold in some European countries passed the

correspondent European emission standard.



Non-CO2 fuel emission: stages and legal framework

The stages are typically referred to as Euro 1, Euro 2, Euro 3, Euro 4 and Euro 5 fuels

for Light Duty Vehicle standards. The corresponding series of standards for Heavy

Duty Vehicles use Roman, rather than Arabic numerals (Euro I, Euro II, etc.)

The legal framework consists in a series of directives, each amendments to the 1970

Directive 70/220/EEC. Here is a summary list of the standards, when they come into

force, what they apply to, and which EU directives provide the definition of the

standard.

Euro 1 (1993):

o For passenger cars - 91/441/EEC.

o Also for passenger cars and light trucks - 93/59/EEC.

Euro 2 (1996) for passenger cars - 94/12/EC (& 96/69/EC)

Euro 3 (2000) for any vehicle - 98/69/EC

Euro 4 (2005) for any vehicle - 98/69/EC (& 2002/80/EC)

Euro 5 (2008/9) and Euro 6 (2014) for light passenger and commercial

vehicles - 2007/715/EC

These limits supersede the original directive on emission limits 70/220/EEC.



Annex XI. Overview of the situation of the production centers

Location of automotive companies’ production

centers in China (2009)

Four main auto production zones

Yangtze Delta Shanghai Hangzhou Ningbo Nanjing Lingang Yizheng

Pearl River Delta Guangzhou Shenzhen Liuzhou

Shengyang Yantai Qindao Tianjin Jilin

Shiyan Wuhan Xiangfan Wuhu

Four main sea RORO terminals & Yangtze River terminals

①  Guangzhou Port Nansha Automotive terminal Co. Ltd. * ②  Shanghai Haitong International automotive terminal Co. Ltd.* ③  Tianjin Port roro terminal Co.Ltd. * ④  Port of Dalian Automotive Terminal Co. Ltd. * ⑤  RORO in Wuhu ⑥  RORO in Wuhan ⑦  RORO in Chongqing

* The four sea RORO terminals are the only ones that are allowed to import passenger cars.

The Big 3

•  SAIC •  FAW •  DFM

SAIC Group — Mfg、R&D Center

Shanghai Nanjing

Liuzhou

Yizheng

Qindao

Yantai

Shenyang

Chongqing

Manufacturing base

R&D Center

Shanghai Anting

Nanjing Shanghai Lingang

①  Shanghai ②  Ningbo ③  Tianjin ④  Shenzhen ⑤  Guangzhou ⑥  Dalian

SAIC Motor Overseas — Mfg、R&D Center、Office Manufacturing base

R&D Center

Company

North America Inc. (Detroit, USA)

SAIC Europ GmbH (Hambury. Germany)

SAIC Korea Co., Ltd (Seoul, Korea)

Saangyong Motor (Oyongyang, Korea)

SAIC Japan Co., Ltd. (Tokyo, Japan)

SAIC Hong Kong Co., Ltd.

Production base (Longbridge, UK)

SAIC Motor Technical Center (Leamington Spa. UK)

Production base (Mexico, South America)

FAW Group — Mfg、R&D Center Manufacturing base

R&D Center

Sichuan

Heilongjiang

Jilin

Tianjin

Shandong

Yunnan

Hainan

Tianjin

Qindao


Dongfeng Motor — Mfg、R&D Center Manufacturing base

R&D Center

Liuzhou

Xiangfan Shiyan

Wuhan

Guangzhou

Wuhan

Guangzhou


New Players

•  Chery •  Geely

•  Great Wall •  BYD

Chery Group — Mfg、R&D Center Manufacturing base

R&D Center

Anhui Wuhu Shanghai


Chery Group Overseas — Mfg、R&D Center、Office n  Manufacturing base

R&D Center

Company

Iran

Uruguay

Indonesia

Russia

Egypt

Ukraine

Geely Group — Mfg、R&D Center Manufacturing base

R&D Center

Shanghai

Linhai

Ningbo Luqiao

Lanzhou

Xiangtan Linhai

Shanghai

Jinan

Ningbo Luqiao

Hangzhou


Great Wall — Mfg、R&D Center Manufacturing base

R&D Center

Hebei Baoding Hebei Baoding


BYD — Mfg、R&D Center Manufacturing base

R&D Center

Beijing

Xi’an

Shenzhen

Shanghai Shanghai

Shenzhen


Joint Ventures

•  GM – SAIC •  VW – SAIC

•  Changan – Ford

SAIC VW — Mfg、R&D Center Manufacturing base

R&D Center

Shanghai Shanghai

Nanjing


SAIC GM — Mfg、R&D Center Manufacturing base

R&D Center

Shenyang

Shanghai Jinqiao

Yantai

Anhui Guangde Shanghai

①  Shanghai ②  Ningbo ③  Tianjin ④  Shenzhen ⑤  Guangzhou ⑥  Dalian *Liuzhou base is hold by SGM-Wuling

Liuzhou

Chang’an Ford Mazda— Mfg、R&D Center Manufacturing base

R&D Center

Nanjing Nanjing

Chongqing


perspectives on the evolution of the automobile … · the cars sales ratio that are the indicators...

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