Auto industry engine for modern Shenyang economy

Home to BMW Brilliance and range of other car companies

Alexander Morgan, a 37-year-old baker from Germany, long had a dream of opening a bakery at Shenyang, the capital of Liaoning province.

Yet it was the auto industry that made it reality.

Morgan said he saw more and more Germans coming to the city in Northeast China to work and invest over the past few years.

"Their arrival helped boost my business," he said.

As one of the old industrial centers in China, the Shenyang government is now putting great efforts into modernizing the city's manufacturing and service industries.

The city has already attracted a large volume of domestic and Western investment, the official said, adding auto business in particular has greatly aided the modern economy.

There are now 53 German companies operating in Shenyang, 21 of them auto-related..

BMW Brilliance Automotive, a joint venture by BMW and Brilliance China Automotive Holding, makes BMW luxury cars. It also operates the brand's sales and after-sales service networks.

Its most recent investment was 1.5 billion euros ($2.1 billion) for a new factory in Shenyang's Tiexi district that includes a test track, world-class advanced manufacturing facilities, warehouses and production lines for the BMW X1 SUV.

Construction on the first phase of the plant was finished in 2012. At full build-out it will increase the joint venture's production capacity to 400,000 cars and 800,000 engines, surpassing Germany and the United States as the biggest production center for BMW globally, according to the local government.

"China has become the largest market for BMW in the world. The Tiexi plant speeds up our localization," said Norbert Reithofer, chairman of BMW. "China is increasingly important in our global strategy."

Shanghai General Motors Co has also built a factory in Shengyang, with the third-phase of Norsom Motors operation put in trial production last month. It is designed to have an annual capacity of 300,000 cars and 450,000 engines, the official said.

Brilliance also has two other major auto factories in Shenyang that make its Zhonghua and Jinbei brands.

Four of the facilities, including BMW's first factory, are located in Shenyang Motown.

Sprawling across 70 square kilometers, Motown has more than 100 auto-related manufacturers from across the world including Draexlmaier Group, ZF Friedrichshafen AG and Wurth Group.

The annual output of the Motown area increased from 260,000 vehicles in 2007 to 680,000 in 2012, with the number of models produced rising from eight to 19.

The annual output was valued at 109.2 billion yuan ($18.2 billion) last year.

"Shenyang Motown plays an important role in Shenyang's and even Liaoning's development strategies," said Li Yinghua, head of the Motown management committee. "It has many advantages in policies, talent, technology and industries."

In addition to German companies, tire producers Bridgestone from Japan and Michelin from France also have large operations in Shenyang.

In 2012, Michelin spent 8.7 billion yuan ($1.45 billion) to build a tire factory in the city, its biggest-ever investment in China.

According to the local government, the automobile industry contributed 60 percent of Shenyang's tax revenues in 2012.

"The auto industry is the engine of the Shenyang economy and one of the business cards for the city," said Chen Haibo, mayor of Shenyang.

Professor Huang Taiyan, president of Liaoning University in Shenyang, said the development of the auto industry is a sign of industrial modernization and helps improve the service sector with the arrival of more foreigners.

"It meets the long-term goal of the Shenyang government to become a top-tier city," he said.

Contact the writers at liuce@chinadaily.com.cn and wuyong@chinadaily.com.cn