DETROIT – Changfeng (Group) Co. Ltd. Chairman and CEO Li Jianxian says his company is making progress on plans to come to the U.S. by 2009, although he admits the Chinese auto maker hasn’t yet figured out a specific game plan.
All options are on the table, he tells reporters through a translator at the North American International Auto Show here, including setting up assembly operations in the U.S. as part of the brand’s launch.
Li says Changfeng already is exploring such a setup in Europe, where it is talking to potential partners about semi-knocked-down assembly of vehicles shipped in from China. He would not identify what companies are involved in the discussions, where the assembly would take place or timing, however.
“Step by step,” he says when pressed for details on his European plans. “We’re focusing on America first.”
Although Li says Changfeng still is on track to establish an American beachhead in 2009, a goal he set at last year’s auto show here, he declines to detail the auto maker’s plans. Asked how many vehicles he wants to sell in the U.S., he replies, “Ha! The more the better.”
More details will be revealed at the 2009 Detroit show, he promises.
“We are coming here (to the NAIAS) not only to showcase our vehicles but to find a way to come to this market.
“We could sell our products directly to the market or we could have an assembly line here,” he says on the sidelines of the NAIAS. “We’re still investigating options, (but) some people say to set up a line here. A plant is one option.”
The auto maker does say dealers from the U.S., Russia and other countries visited Changfeng in December to discuss issues related to exporting cars from China and says it is well along establishing sale and post-sale channels in Russian and East European markets.
Li says Changfeng’s efforts at the last two Detroit shows indicate the auto maker is progressing in its plans to sell cars in the U.S.
“Last year, we brought engineering prototypes here,” he says. “This year, all the vehicles we have here have rolled off production lines. We believe we are taking steps toward that goal.”
Li says he is confident Changfeng’s lineup of SUVs and multipurpose vehicles will find an audience here.
“We know the SUV segment is mature in the U.S.,” he says. “We will emphasize our technology, safety and fuel efficiency. The CS6 (compact SUV) gets 30 mpg (7.8 L/100 km), so we think we have a good chance.”
Changfeng’s display here emphasizes the CS6, now on the market, and soon-to-be-launched CS7 SUV (to be badged a Leopard, Changfeng’s new “international” brand) and Kylin microvan.
The Kylin uses a chassis calibrated by U.K.-based Lotus Group’s engineering operations and comes with aMotors Corp. powertrain. Changfeng has partnered with Mitsubishi to build that car maker’s Pajero small SUV and derivatives in China and relies on the Japanese auto maker for some technology.
The CS6, which Changfeng dubs an urban SUV, features styling by Italy’s Pininfarina SpA.
Li says in the past year, Changfeng has accelerated its own development in order to prepare for expansion into global markets.
“With globalization in mind, in 2007, we progressed and strengthened ourselves in areas such as capital utilization, technology innovation, enhancement in human resource and global presence,” he says. “We strengthened our own product development capability, strived for innovation, designed and launched outstanding products.
“We established two design centers in Beijing and Changsha, with the goal of developing at least two brand new vehicles each year, including an SUV, passenger car, pickup and multipurpose vehicle.”
The Chinese market, where new-vehicle sales rose 22% last year to 8.8 million-plus, is becoming “saturated” with both domestic products and international brands, prompting Changfeng to try to expand its horizons, Li says.
“I believe Changfeng must set our mind globally,” he says. “We must step out of our comfort zone, bravely step into the platform frontier of global competition. This is the only pathway to prove ourselves as a truly global player.”
Changfeng was founded in October 1996 from a group of factories once controlled by the People’s Liberation Army of China. Since September 2001, it has been under the administration of the Hunan provincial government.
It encompasses 11 subsidiaries, employs 6,300 people and claims assets totaling RMB6.8 billion ($938 million). The company builds vehicles in Changsha and Youngzhou in Hunan province and in Chuzhou, Anhui province.
The auto maker’s 5-year plan calls for capacity to produce 288,000 vehicles annually by 2010, with assets of RMB28 billion ($3.9 billion) and annual revenues of RMB41.7 billion ($5.8 billion). Its 2010 volume target includes 100,000 SUVs, 60,000 passenger cars, 20,000 MPVs and 100,000 pickups.