GAC Forecasts Market Growth, Rise of Independent Brands

China’s auto market will keep on growing at a rate of 10 percent per year for 20 to 30 years, predicts Xie Zhihong, vice president of Guangzhou Automobile Group Corp. (GAC) Passenger Vehicle Co.

Xie estimated an output and sales volume of 30 million units in 2015, 50 percent of which would come from independent brands.

China independent brands started at the low-end market and will gradually rise into the mid- and high-end markets.

Xie predicted that independent brands will become dominant in the A-class and below segment markets in five years and take the market with JV brands on a 50:50 share basis in the B-class and below segment markets in another five years.

Self-developed vehicles, according to Xie, will dominate the whole China market after 10 years’ development.

GAC has developed rapidly in the past 10 years, with sales increasing from less than 150,000 units into the current 750,000 units. The automaker’s sales revenue rose from ¥40 billion ($5.88 billion) in the beginning to today’s ¥160 billion, with this year a possible breakthrough, said Xie.

GAC launched a self-development and independent brand project in 2005, focusing on the company’s traditional advantages, the mid- and high-end passenger vehicles.

The group established its own auto engineering research institute in 2006, which has developed into quasi-national level and employs almost 1,000 engineers at the current stage.

GAC’s Trumchi sedan.

GAC plans to develop three passenger-vehicle models at the same time and to become a national research institute in five years.

The Guangzhou-based automaker set up an independent brand working group in 2007 with the president as the group leader.

The company also invested ¥6.8 billion in building a high standard R&D plant for self-developed vehicles. GAC’s Chuanqi (Trumpchi), the first self-developed sedan of GAC, has been tested over 200 times in different crash and performance tests in various extreme weather conditions.

The Trumpchi rolled off the production line in September last year and was rated 4.8 stars in the CN-CAP crash test in April this year.

The Trumpchi cars have also been officially used by the Asia Games Organizing Committee and the Guangdong government, said Xie.

“Our output capacity for independent band vehicles has been expanded to 200,000 units from the past 100,000 units, with supporting facilities meeting the needs of producing 400,000 whole vehicles and engines.”

The 2.0L series Trumpchi has hit the market for less than half a year and witnessed a sales volume of nearly 10,000 units.

The company will release the 1.8L series Trumpchi soon and a SUV model at the end of this year. GAC will also launch an A-class model in 2012 and a sports version of the Trumpchi luxury around 2013.

With technological innovation, GAC plans to release at least one new model per year to rapidly enter the A-, B- and C-class segment markets.

The company will endeavor for a production capacity of 400,000 units and realize output and sales of 300,000 units (including SUVs and MPVs) by 2015.

According to Xie, GAC has a full range of engines from 1.6L to 2.4L. The company has also successfully developed its own 6-speed and 7-speed automatic transmissions and will launch them in the market later on.

China Automotive Review