Beijing
Motor Show Index
GM announces $3 billion expansion in China

2004 Cadillac XLR
General Motors will invest roughly $3
billion for a massive expansion of its Chinese production capacity, which will
be accomplished by a major new-product assault. GM will take its production
capacity from a current 550,000 to 1.3 million units by the time the project is
completed in 2007, said Phil Murtaugh, chairman and CEO of the GM China Group.
Powertrain operations in China would be expanded accordingly. Murtaugh said the
investment prompts "an unprecedented race among global automakers" to tap into
the booming Chinese market that has been growing at a rate of up to 100 percent
annually in recent years. He noted the project will create significant
investment and employment opportunities outside China for other GM operations to
supply parts and components to the rapidly expanding assembly lines. GM has been
steadily expanding its operations since setting up its first assembly line in
1998, but the rate of growth exceeds its own earlier expectations.
Late last year it
announced a plan that would have taken production to 865,000. The new expanded
plan will allow GM to produce 20 new and significantly updated products,
including at least three from Cadillac. Initially the automaker will import the
CTS, SRX, and XLR, but it will later switch to local production. GM's
announcement comes just before the Beijing Motor Show, at which other
manufacturers are expected announce significant expansion plans. But at this
time of expansion there are growing concerns of a market slowdown. Murtaugh said
he is not especially concerned, because pent-up demand is just so great that any
slowdown will only be a temporary one.
-TCC Team
Ford to Focus on China with new concept

Ford Focus China concept
Ford Motor Co., a latecomer to the booming Chinese market,
has introduced its first-ever concept designed specifically for the Asian
nation. The Focus concept will officially go on display later this week when the
Beijing Motor Show opens its doors to the public. The prototype is a slight bit
larger than the current Focus models sold in the U.S. and other markets,
especially in terms of interior and trunk space. There's a more rounded look
than today's angular model, as well. "This Concept presents the four-door as the
style setter for the next generation of car buyers in China," explained Paul
Gibson, Ford's design manager for the Asia/Pacific region.

Ford Focus China concept
Specific production plans are unclear, but Ford is now
trying to build a position in China, where it lags behind such competitors as
Volkswagen, DaimlerChrysler, and General Motors - which just announced a $3
billion expansion program. Ford only began production in China in January of
2003, working with its partner, Changan Automotive Group. It now produces
Chinese versions of both the Fiesta and Mondeo and is expected to continue
building on the lineup. At this year's auto show, Ford will also display import
models from a number of its global brands, such as Volvo and Aston Martin.
-TCC Team
Ford sees big share gain in China
Insisting Ford is "here for the long haul," Ron Tyack, president and CEO of
Changan Ford, denied criticism that the number-two U.S. automaker has been far
too timid in its Chinese growth strategy. Ford and its partners are now looking
to spend about $1 billion in an expansion plan that, among other things, will
boost production capacity in Chongqing from 20,000 to 150,000 units a year. And
it is preparing plans for a second plant in Nanjing. Ford is also stepping up
imports and, for the first time at the Beijing Motor Show this week, will
display products from global brands such as Aston Martin and Jaguar that it
believes will have big potential in China's mushrooming luxury market. Ford's
Volvo division already is a small but successful import brand, and Mazda is
looking for volumes approaching 100,000 in China this year. All told, Nyack
acknowledged a near-term goal for Ford's various brands to capture anywhere from
seven to ten percent of the Chinese market. At the current pace, with sales
expected to hit five million this year, that would mean Ford group volumes of
more than 350,000. Nyack declined to say just how much more capacity Ford might
eventually need to meet its goals. -TCC Team
Investment and product announcements increase
The Chinese government continues easing back on restrictive rules limiting
product and investment programs. Last year, that permitted automakers to launch
a record number of new products, estimated at roughly 70 passenger cars and
light trucks. The number is expected to grow in 2004, according to various
sources. But while Auto China 2004 brings plenty of product news, the event is
bookmarked by investment announcements adding up into the billions. Ford's $1
billion expansion program was dwarfed by GM's release of a $3 billion plan that
would more than double its Chinese production capacity. Meanwhile, Volkswagen
has issued word of its own $5 billion program - though many observers expect the
German automaker to scale that back. Western and Japanese parts suppliers also
are making news in Beijing. PSA Group detailed plans to set up a large research
center in the southern Chinese boomtown of Shenzhen. And Siemens VDO said it
will double the size of its auto gauge venture with partner Wuhu Co. Ltd.
-TCC Team
China's consumers want luxury

Cadillac XLR temple China
Not all that many years ago, conventional wisdom suggested
Chinese consumers would want small, inexpensive, and very basic transportation.
Reality is proving very different, as the high-line segment becomes the
fastest-growing piece of the booming Chinese market. While luxury cars account
for only about two to three percent of current sales - estimated to reach
120,000 top-end vehicles in 2004 - automakers are betting the share will surge
with the arrival of more top-end product. On Tuesday, Lexus announced it will
open fourteen Chinese car dealerships in China by mid-2005. Ford is set to start
selling Astons and Jaguars, and Nissan is looking to develop demand for
Infiniti. Even Ferrari is set to begin selling products in China this year.
Cadillac took reporters out to visit the Great Wall on Tuesday, where it
provided a driving opportunity. CTS and SRX models will begin rolling into
showrooms by late in the year, with the XLR to follow in 2005. Initially, they
will be imported, but production of Chinese-made versions of the CTS and SRX
will debut shortly afterwards. "By 2010, China could represent 15 percent to 20
percent of our total volume," Caddy General Manager Mark LaNeve noted. BMW has
just begun producing a version of its 5-Series in Shenyang, meanwhile, and
Mercedes-Benz is preparing Chinese-made versions of its C- and E-Class models.
-TCC Team
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