Multinational giants competing to expand production in China to strengthen product strategy


The process of restructuring the layout of the global automotive industry continues to accelerate in China.

Recently, the third phase of Shanghai GM Besson’s factory was officially put into production, which means that Shanghai GM’s production capacity in the old industrial zone in Northeast China has increased to 500,000 vehicles. Shortly before the start of the third phase of the Beisheng plant, the second phase of the Shanghai GM Wuhan plant was officially approved.

The reporter learned that since this year, multinational companies such as GM, Volkswagen, and Hyundai have all planned to increase new production capacity in China. With the further expansion of production capacity, the product lines of these branded joint venture companies in China are further enriched. Among them, GM, Volkswagen, Hyundai and other brands tend to strengthen the family-oriented product strategy and strengthen their models' penetration into the market segments.

Speed <br> <br> multinational expansion in China recently, Shanghai GM announced Beisheng plant officially put into operation three projects with a total investment of 7.0 billion yuan, the platform can accommodate 3 5 models collinear production, annual production capacity of 300,000 Complete vehicle and 450,000 engines. Among them, the new Cruze that has just been listed recently has settled in the third phase of the Beisheng plant, and the 1.4T and 1.5L engines on the new Cruze will also be mass-produced at the new plant.

Chen Hong, chairman of SAIC, told reporters: “With the start of the third phase of the project, Shanghai GM’s Beisheng plant will form Buick and Chevrolet brands, GL8, Captiva, the old Cruze, and New Cruze four platforms, GL8 commercial vehicle and GL8 luxury. The production capacity of the six-vehicle models of commercial vehicles, Kopac, old Cruze, Cruze hatchback and new Cruze will add strength to Shanghai GM’s continued market advantage.”

Prior to this, the second phase of Shanghai GM Wuhan Plant was officially approved. It is reported that the project will invest 7.5 billion yuan, after the completion of the new 360,000 production capacity. By then, Shanghai GM Wuhan will increase its production capacity to 660,000 vehicles. At the same time, the Shanghai GM Wuhan Plant Phase II project has also entered the preparatory stage. This project will invest 3.978 billion yuan, and it will put into production 1.0T and 1.2L engines in the future.

Just before the Shanghai GM capacity expansion project was exposed, its competitors FAW-Volkswagen and Shanghai Volkswagen also disclosed their capacity expansion plans.

At the beginning of May, FAW-Volkswagen announced that the second phase of the Foshan plant was formally laid and the new production capacity was 300,000. At the end of May, Shanghai Volkswagen and the Ningbo Municipal People's Government signed an agreement to increase the production capacity of 300,000 cars and 100,000 commercial vehicles at the Ningbo plant and start production at the beginning of 2016.

In July, during the visit of German Chancellor Angela Merkel, Volkswagen AG signed a "Joint Statement on the Establishment of a New FAW-Volkswagen Production Base" in Beijing. FAW-Volkswagen will build two new production bases in Qingdao and Tianjin.

At the same time as the first camp's joint-venture carmakers accelerated capacity expansion, other car joint ventures did not slow down. At the beginning of this year, Dongfeng Yueda Kia's third plant was formally put into operation with a production capacity of 200,000 units in the first phase, which is expected to be reached in the first half of 2014; by 2015, 300,000 capacity will be formed. Subsequently, South Korean media reported that the fourth and fifth Beijing modern factories are expected to start at the same time, and its production capacity is expected to increase by more than 50% on the basis of the current 1.1 million vehicles.

Strengthen family-oriented product strategy <br> <br> joint venture enterprises accelerate expansion at the same time, product strategy are being adjusted. Since last year, many companies have begun to emulate the "Family Spectral" product strategy of Korean cars, that is, relying on a product platform to launch a variety of models, or to achieve sales of two generations or even three generations of models to form a product family.

In Beijing Hyundai Motors launched Elantra, Elantra and Lang three generations of models selling together. After launching the A-class market, last year, the same map as Sonata 8 was also officially launched. The two brother models jointly attacked the B-class market.

This year's Korean car has a good performance in the B-class and A-class markets. In the previous July, Korean A-Class vehicles sold a total of 390,000 vehicles, an increase of 7.38% year-on-year, which was the second only to the US Department of Sport. In the previous July, a total of 148,100 B-class vehicles were sold, a year-on-year increase of 44.5%, making it the highest growth rate in the B-class market.

VW and GM also reinforce similar product strategies. Shanghai Volkswagen launched its "family" product offensive last year after the listing of the new LaVida, which includes six models of the "Langyi Family", including hatchback models and Longitudinal models.

Recently, Shanghai General Motors revealed that following the listing of the new Cruze, the old Cruze will not be delisted, forming new and old models.

According to the analysis, the “family” product strategy needs more production capacity to support, which has also become an important reason for joint ventures to accelerate expansion.



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