Monday, December 10, 2012

CHINA DAILY: SAIC and Charoen Pokphand Group form Thai joint venture


Moving to tap markets in Southeast Asia, China's largest automaker SAIC Motor Corp recently agreed to form a joint venture with Charoen Pokphand Group to produce its MG cars in Thailand.

The Shanghai-listed automaker said in a statement last week that it will have a 51 percent stake in the planned joint venture, and CP Group, the biggest conglomerate in Thailand, will hold the remaining 49 percent.

With initial investment of 1.8 billion yuan ($290 million), the joint venture is set to start production in 2014. It will have an annual production capacity of 50,000 vehicles at the outset, which could increase to 200,000.

It is the first SAIC joint venture with a foreign partner to produce its own brand passenger vehicles overseas, part of the company's efforts to greatly boost its foreign deliveries to 800,000 vehicles a year by 2015.

SAIC said that it also plans to export the Thailand-made MG to other Southeast Asian markets and some countries elsewhere that use right-hand-drive vehicles.

Nanjing Automotive Co purchased UK auto group MG Rover in 2005 following its bankruptcy. SAIC later merged with Nanjing auto and now makes its own passenger vehicles under the Roewe and MG brands.

Thanks to its successful partnerships with GM and Volkswagen, SAIC has become the leading automaker in China, but it still lags behind smaller domestic counterparts such as Chery Automobile Co and Great Wall Motors in overseas businesses for wholly owned brands.

Though it has annual sales of some 4 million units, SAIC exported only about 60,000 vehicles last year, the majority of them are Chevrolets made with its joint venture partner General Motors. The exports also included a small number of MG cars assembled at SAIC's plant in the UK.

According to domestic media reports, SAIC also plans to bring its wholly owned commercial vehicle brand Maxus Datong to Thailand for local production when the time is right.

An important auto-manufacturing hub in Southeast Asia, Thailand produced a record high of more than 2 million vehicles in the first 11 months of the year, nearly half of them for export. The Thai Automotive Industry Club previously said that the nation's annual automobile output will hit 3 million in five years.

Japanese carmakers currently lead Southeast Asian markets with massive production facilities in both Thailand and Indonesia.

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