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Global View

1Chinese Car Industry

China increasingly vital to big car groups' profits

  • Trade barriers and new regulatory demands imposed by Beijing almost monthly have failed to prevent foreign carmakers from making outsized profits in China, even as the groups complain about unfair treatment.

  • Most large automakers make at least one-quarter of their profits in China, far more than the share of vehicles sold there in many cases, recent analysis shows. The only way around these is to build plants locally, and that can only be done in a joint venture with a local state-owned company.

  • Policymakers in Berlin and Washington have started to press Beijing on its restrictive regime for foreign carmakers.

  • However, fat profits for now ease the pain. "They make a lot of money here so being friends with the government is necessary to be in this market," said one industry expert. (Financial Times, Aug. 13)

2Automakers & Brands

Fuel station giant drives into car sales

  • China Petroleum and Chemical Corp, the world's largest refiner, which is also known as Sinopec Corp, is foraying into auto sales, based on its nationwide fuel station network.

  • One of Sinopec Corp's fuel stations in Beijing has already sold its first car two weeks ago. It is currently cooperating with automobile e-commerce platforms for launching auto sales. It is also keen to cooperate with more partners, including e-commerce companies, in the future.

  • The company, which had set up pilot projects to sell cars in Hunan and Hebei provinces last year, said the most prominent feature of its car sales efforts is the unique shopping experience marked by convenience.

  • Experts believe Sinopec Corp can benefit from its extensive petrol station network, and its involvement in the automobile sector will alter the market pattern at a time when competition is intensifying. (China Daily, Aug. 14)

Hyundai launches first EV for China

  • Hyundai Motor Co. recently launched its first electric vehicle for China - an electric version of the Elantra compact sedan - to improve its fleetwide fuel economy.

  • The electric Elantra is produced by Beijing Hyundai Motor Co., the Korean automaker's joint venture with state-owned Chinese automaker BAIC Motor Group Co.

  • The car has a starting price of RMB 199,800 ($29,800) before subsidies. 

  • Buyers can qualify for an RMB 23,000 incentive from Beijing Hyundai as well as government subsidies that vary among regions. In Beijing where the joint venture is headquartered, the electric Elantra also qualifies for RMB 66,000 in municipal subsidies. (Automotive News China, Aug. 11)

Geely deliveries surge on demand for new models

  • Geely Automobile Holdings' deliveries rose 88% to 91,104 vehicles in July on strong demand for four models launched in 2016.

  • Those models are the Geely Boyue SUV, Emgrand GS crossover, Vision SUV, and Emgrand GL sedan.

  • For the first seven months of the year, Geely Auto's deliveries totaled 621,731 vehicles, up 89% year on year. If the sales pace continues, the company is likely to meet its annual sales target of 1.1 million vehicles.

  • With strong sales of its existing models, Geely Auto is preparing to go upscale. This year, the company plans to begin sales of the first model by its new Lynk & CO brand in China. (Automotive News China, Aug. 11)

Hyundai and Genesis to cut product design cycles in half

  • Hyundai has revealed that it plans to cut the product design cycles in half for its namesake brand and its Genesis luxury division. According to a recent report, the move is mean to help the automaker keep its products fresh and respond quickly to changing trends and newcomers to the auto industry like Tesla, Waymo and startups with financial backing from China.

  • Luc Donckerwolke, Hyundai and Genesis senior vice president of design, says that the automaker wants to cut the time from sketches to production from three years to 1.5 years. 

  • Donckerwolke revealed that it is possible to cut the design process in half partly thanks to the opening of a new design studio within Hyundai Motor Group's Namyang facility. The new design studio will be responsible for 65 projects between Hyundai and Genesis, and will be able to work on 25 of them at the same time. (Motor Trend, Aug. 12)