Cars

FAW-GM to double light commercial vehicle capacity

By Li Fangfang (China Daily)
Updated: 2010-09-04 11:20

?The Jiefang 501 model by FAW-GM.

BEIJING - General Motors said on Friday that its joint venture with FAW Group plans to double production capacity of light commercial vehicles in China.

"We plan to be a major player in the light-duty truck market in the short term and lead the market in terms of sales over the long term," said David Dunahay, president of FAW-GM Light Duty Commercial Vehicle Co Ltd.

The Changchun, Jilin-based company is currently the fourth-largest manufacturer of light-duty trucks in China. Set up last year, FAW-GM, has sold 61,000 units till this August.

"China's light-duty truck market accounts for more than 50 percent of the global market. We are confident of being the leaders in the segment soon," said Dunahay.

As part of the capacity expansion plans, FAW-GM will relocate its plant in Harbin, Heilongjiang province. The new facility is expected to start operations by early next year. Combined with the plant in Qujing, Yunnan province, its light-duty trucks annual output capacity is to reach 200,000 units.

The nation's robust economic growth has also increased demand for vehicles to transport goods.

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High-end light commercial vehicles offer relatively high profit margins and hence the sector could see the entry of more foreign players, said analysts.

Last year, China sold 1.5 million light-duty trucks. Dunahay expects the sales to reach 1.8 million this year.

Dunahay said that his company plans to upgrade the low-end products to mid-end products in a bid to meet the market requirement.

The company's light-duty trucks are sold under the name of FAW Jiefang in China. In January, it launched Jiefang 501, a mid-level light-duty truck.

"China's light-duty commercial vehicle market is extremely competitive. We must have competitive products with competitive prices," said Dunahay.

"We expect to increase our market share by upgrading the products from low- to high-end," he said.

"Strong after-sales service network is also a key ingredient for our success in China. Hence we are focusing more on upgrading our dealer-networks and services," said Dunahay. FAW-GM plans to have 588 dealerships by the end of this year, he said.