Business / Auto China

'Most important car on earth'

By Li Yang and Du Xiaoying (China Daily) Updated: 2014-01-13 10:52

'Most important car on earth'

Scenic Liuzhou in Guangxi Zhuang autonomous region has a population of 1 million people and makes 2 million vehicles annually. [Photo / China Daily]

"Their needs and tastes change every two to three years. They want more comfortable and bigger cars, not only to carry goods as before, but also take their families for refreshing short trips," said Yao Liwen, general manager for marketing at Dongfeng Liuzhou. "We must be very responsive to the changes."

Yet one common thing shared by different generations of the buyers is that the car must be cheap and sturdy.

"Automobile makers win out by being different or controlling costs," said Frank Xue, director of public relations at SGMW. "We just succeed by providing reliable cars at minimum costs."

Largest automaker

SGMW, with minivans and MPVs as its core products, made 1.6 million vehicles in 2013 to become the largest automaker by output in China.

The company is a three-way joint venture with 50.1 percent owned by SAIC Motor.

Liuzhou Wuling Motors holds 5.9 percent and GM China has a 44 percent stake. The venture plans to produce 100 billion yuan worth of products next year.

Wuling starting by mimicking Citroen and some Japanese minivans in the 1970s. By the early 1980s its vehicles were well known in the country for their adaptability, capacity and low maintenance costs.

SGMW developed three models from the old design - the Sunshine, Rongguang and Hongguang.

'Most important car on earth'

The vehicles became bigger and more comfortable with seven-seat models like the Hongguang, which was recently classified by the China Association of Automobile Manufacturers as an "economical MPV".

"We have more than 3,000 dealers in cities and towns across the country," said Zhou Xing, an executive at SGMW. "The large marketing and service network is our big strength."

When SGMW was established in 2002, Wuling minivans had a respectable but not dominant 18 percent share of the segment.

With diversified models and improvements in technology and service, Wuling now has about 48 percent of the market.

Many grassroots Wuling dealers drive out to the countryside to offer maintenance services for consumers living far from towns.

"Our after-sales service business is increasing at twice the speed of our production," said Xue. "The competition among Chinese minivan and MPV makers is to see who can extend their marketing and service network to the county and township domains faster than the others. We are doing our best in some key markets like Southeast China."

Expanding overseas

He noted that GM's global manufacturing and marketing system laid a solid foundation for SGMW to explore overseas markets.

It started producing the Wuling Rongguang in Egypt in 2012 that is distributed by the GM sales network.

"We sell cars as well as our technologies," said Xue. "This is big progress in our overseas expansion. We are eyeing the Southeast Asian and South American markets now."

"Wuling is the most popular minivan brand among local consumers in Egypt and its price is even higher than its Japanese competitor Suzuki," he added.

SGMW started producing the Wuling Hongguang - which carries the Chevrolet badge - in India in 2010. The vehicle was elected the second-most popular minivan among locals in the first year it was on sale, according to Xue.

Back in China, SGMW purchased a manufacturing facility in Qingdao, Shandong province, in 2005 and started to produce Wuling vehicles there in 2008.

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