BAIC 5 Billion Shifts to North-Beiqi GAC "Infighting" Upgrading

Among the “four big and four small” automobile groups that have been newly designated by the State, the Beijing-based Beijing Automobile Group and Guangzhou’s Guangzhou Automobile Group rank the top two in the “four smalls” and are also the two most ambitious outsiders. Automobile Group, the two have competed in the Fujian Automobile Group. Last week, Beijing Automotive Group headed south to Guangzhou, making the situation where the two did not interfere with each other.

Beiqi restructuring

Guangzhou Baolong (light steam)

On August 18th, Beijing Automotive Group signed a cooperation agreement for the North China South China Base project to obtain all the stock assets of Guangzhou Baolong Group Light Vehicle Manufacturing Co., Ltd. (hereinafter referred to as “Guangzhou Baolong Light & Steam”) in a restructured way, with wholly-owned subsidiaries. In the form of building a South China base, the base settled in Zengcheng, Guangzhou. According to the plan, BAIC Group will build a South China base for the production and export of BAIC's own-brand passenger cars based on the reorganization of Guangzhou Baolong Light & Gas.

Beiqi Huanan Base plans to establish two vehicle factories in phased construction. The first plant will be transformed and expanded to an annual production capacity of 100,000 vehicles on the basis of Guangzhou Baolong's existing plant, and the second plant will have a planned production capacity of 200,000 vehicles per year. The total investment of the project is 5 billion yuan. After the two-phase production capacity reaches 300,000 units, it is estimated that the annual sales revenue will be 20 billion yuan, and the entire vehicle and parts and components can realize an output value of approximately 80 billion yuan, which will drive the rapid development of the related automobile service industry.

In fact, this is not the first time that Beijing Automotive Group has moved south. As early as the end of the last century, Foton Motors, a subsidiary of BAIC Group, has set up a factory in Nanhai. It is reported that Guangdong Futian New Energy Automobile Company, which annually produces and sells 10,000 passenger cars, is also planning to lay the foundation in August. Beiqi's offensive in Guangdong Automobile Base Camp Guangdong is a bit aggressive.

“There are many similarities between the two brands in terms of self-owned brands, mergers and acquisitions, and even listing on the capital market. Beiqi is considered to be the largest auto group competing with Guangzhou Automobile.” Insiders of GAC Group told the newspaper.

Scale, layout, and public relations: BAIC dominates

The appearance of BAIC South is connected with GAC short-sighted soldiers, and everyone will inevitably review the strength of BAIC and GAC again. In the first half of this year's ranking of the auto group's competitiveness, BAIC took an advantage in its strategic layout, scale, and public relations.

In 2009, BAIC ranked first among domestic “four small” auto groups with sales of 1,243,000 vehicles, which was twice that of the 600,000-level Guangzhou Automobile. In the first half of this year, BAIC Group produced 733,000 vehicles and sold 746,000 vehicles. It was more than twice as high as Guangzhou Automobile Co., which completed 349,000 vehicles in the first half of the year. Beijing Automotive's ability to reach a major lead in the Guangzhou Automobile, mainly because of Foton Motors, commercial vehicles is one of the short board of Guangzhou Automobile.

In contrast, since GAC Group’s major joint ventures Guangzhou Automobile Group and Guangzhou Automobile Toyota Motor Co., Ltd. grew slowly, the new additions of GAC Changfeng and GAC Hino were too small. GAC Fiat and GAC Geiao are expected to contribute until 2012. It is limited in size. “In terms of scale, we have long since not listed GAC as an adversary.” Beiqi related people told this newspaper that “after Chery’s merger with Volvo, Chery and JAC may also be reorganized into Da’an Automobile, and GAC’s scale pressure will increase. , unless it's swinging north to merge with Brilliance."

“The target of Beiqi this year is 1.5 million. It is not the end, but a new starting point,” said Zhang Xiaozheng, vice chairman of the China Federation of Machinery Industry and director of the board of the China Association of Automotive Engineers. By the end of 2011, BAIC plans to form a planned production capacity of 2 million vehicles, launch its own brand of passenger vehicles, and realize production and sales of 1.8 million vehicles that year, and strive to rank into the first group army by the second group leader. The Guangzhou Automobile's plan is to realize the production and sales of 2 million vehicles by 2015.