SAIC boosts wholly owned brands

Full-year sales are expected to hit 90,000 units. The top Chinese automotive group, also partner of Germany’s Volkswagen and US carmaker General Motor, SAIC plans to double the sales of its two wholly owned brands to 180,000 in 2010.

It will soon introduce several new models of its own brands this year, including the MG6 compact, Roewe A-class model and the Roewe SUV.

The company is also developing new electric vehicles that carry its own badges. It will commercially produce the Roewe 750 petrol-electric hybrid in 2010, which uses 20 percent less gasoline.

In May the company will unveil its first plug-in hybrid electric car, the Roewe 550, which can save more than 50 percent on fuel consumption. The model will be put into mass production by 2012. Also in 2012, the company will launch its own brand of purely electric cars that have zero emission.

Last month, the company announced it will set up a joint venture with US-based A123 Systems Inc, one of the world’s leading lithium-ion battery suppliers, to co-develop battery systems for its electric vehicles.

According to Chen Hong, president of SAIC Motor Co Ltd, developing electric cars is an inexorable trend and auto manufacturers should prepare for the fundamental change.

SAIC has already successfully developed several kinds of new electric vehicles, including a dimethyl ether coach, hybrid coach, electric coach, ultra capacitor coach, hybrid sedan and plug-in fuel battery sedan.

The company plans to supply nearly 1,000 alternative electric vehicles to serve the World Expo this year, including purely electric car, as well as ultra capacitor coaches, fuel battery and hybrid vehicles. It displayed six new energy models for the Shanghai World Expo at the 2009 China International Industry Fair in November last year.

Research and development work on new electric vehicles in China started about a decade ago, but large-scale commercialization of electric cars remained out of reach, mainly due to high prices and recharging problems.

Domestic carmakers such as BYD and Chery are also working on research and development of electric cars.

SAIC began to produce its own-brand cars Phoenix – the name was later changed to Shanghai – in the 1950s but stopped production in the early 1990s. For the following decade, the automaker had no homegrown brands.

In October 2006, the company unveiled its first Roewe brand car, developed on the basis of Rover 75 technology it acquired from the failed British carmaker MG Rover. Its MG brand cars are based on the same technology.

Unlike many domestic automakers that mainly made low-end cars priced below 100,000 yuan ($14,645.15), SAIC positioned its Roewe and MG models as medium- and high-end products from the very beginning.

Since May 2009, the Roewe 550 model enjoyed stable monthly sales of more than 6,000 units, which is seen by the company as a success in building a domestic medium- and high-end brand to compete with counterparts made by the joint ventures.

Currently SAIC has more than 240 dealers for its own brands in China’s first and second tier cities. The company said it will strengthen the sales network in lower-tier cities in the future.

Shanghai Automotive Industry Corp (SAIC) said it will form a $20-million venture with US-based A123 Systems Inc to jointly develop batteries and systems for electric vehicles in China.

The Shanghai Advanced Traction Battery Systems Co, which is 51 percent owned by SAIC, will focus on developing, manufacturing and selling complete vehicle traction battery systems for use in hybrid cars, electric vehicles, heavy duty trucks and bus applications in China.

A123 Systems is a manufacturer of lithium-ion batteries which it will supply to SAIC and other Chinese car makers for use in new energy vehicles.

"The electrification of the global automobile industry is irreversible," said Chen Hong, president of SAIC. "We should grab the opportunity and made sufficient preparation for fundamental changes."

SAIC, the Chinese partner of General Motors Corp and Volkswagen AG, earlier announced it would source hybrid technologies from Delphi Corp and has also reportedly agreed to buy lithium-ion batteries from BYD Automobile Co, a Chinese battery and electric car maker backed by US billionaire Warren Buffett.

Electric cars are becoming a trend globally because of rising awareness of energy efficiency and environmental protection, according to analysts.

SAIC plans to begin marketing a series of new electric vehicles next year, including the Roewe 750 mild hybrid, the Roewe 550 plug-in strong hybrid as well as its self-developed electric car.

Early this year, SAIC invested 2 billion yuan ($293 million) in a new energy company to develop power and control systems to be used in electric vehicles.

Shanghai Automotive Industry Corporation Group (SAIC) plans to invest 6 billion yuan ($879 million) in researching of and making new electric cars starting this year and during the next two years, said group chairman Hu Maoyuan Tuesday.

The investment includes 2 billion yuan to support the research and development of new energy cars, 2 billion yuan for producing parts for new energy cars and 2 billion yuan for the building of car-making factories, Hu told an industry forum in Beijing.

He said SAIC plans to put to market a series of new energy cars next year that could save fuel as much as 30 percent; by 2012, cars that save more than 50 percent less fuel and purely electric cars would be rolled out.

China’s automobile production hit 10 million units in October this year, making its the third country in the world to surpass the annual output mark, according to the China Association of Automobile Manufacturers.

But experts worry traditional cars’ reliance on fossil fuels would cause more serious environmental pollution, which requires "sustainable development", in Hu’s words, for the auto industry.

He said electricity-driven vehicles would be China’s major focus in the sector in the future, while more technological breakthroughs need to be made in car batteries, electric motors and other parts.