Auto sector could see 500b yuan in industrial revenues

Changchun, the capital of Jilin province, is the home of the giant automaker FAW Group, one of China's top five, and is a production base for renowned foreign carmakers such as Audi AG.

About 60 percent of the city's investment comes from automakers or auto parts makers.

In 2007, Changchun had an annual car production rate of more than 1 million units, putting it on a par with the US' Detroit, or Germany's Wolfsburg - one of eight cities in the world with such a production capacity.

Major automakers such as Volkswagen, Toyota, Mazda, and GM have chosen Changchun as a base from which to enter the growing Chinese auto market.

It now has eight car companies, 18 specialized vehicle manufacturers and 416 parts manufacturers. Its vehicle production capacity is expected to reach 2 million units if the major companies increase production as planned, according to local officials.

FAW Volkswagen's second plant plans to increase production to 740,000 units this year, while Sichuan FAW Toyota Motor's Changchun Fengyue Co will increase production to 100,000 units next year.

FAW-GM will reach an annual production capacity of 80,000 units by the end of 2011, and the second phase of the FAW Car Co is expected to produce 200,000 units annually.

More investment projects are coming to Changchun and the historic industrial city has had to make adjustments and improve its industries, officials have said.

Some city government guidelines call for an even bigger auto industry, and a large number of parts companies have gathered in the city.

Changchun's R&D centers have been providing support for any prospects the industry brings.

The auto industry has also improved under the new guidelines, the bureau of industry and information has reported.

Statistics show total 2008 revenue for the industry of 239.1 billion yuan, a 15.6 percent growth over 2007. In 2009, the figure rose to 278.5 billion, a 16.5 percent increase.

In the first eight months of 2010, the industry generated 247 billion yuan in revenues, a 38.3 percent increase from the same period of 2009.

By the end of 2009, the city's 416 parts companies had revenues of 577 billion yuan. One company alone had 10 billion yuan in annual revenues, while 10 had more than 1 billion yuan, 16, more than 500 million yuan, and 83, well over 100 million yuan.

The central government and other provinces have also had plans to boost the auto industry since 2009, but Changchun has its own ideas.

The city will add a production capacity of 1 million vehicles, engines and transmissions by 2013, and will produce 100,000 more specialized vehicles, and add 100 billion yuan more to parts revenues.

The city has its eye on 500 billion yuan in total auto revenues, which of course means even more opportunities for parts manufacturers and related industries.

(China Daily 06/01/2011 page24)