GUANGZHOU Automobile Group Corp announced plans to spend 6.8 billion yuan (US$919 million) on developing its own-brand vehicles yesterday, the latest state-owned car maker hoping to transform into a globally competitive company.
The nation's fifth-largest auto maker inaugurated its new base at the weekend, which includes a 3.8-billion-yuan production plant in Guangzhou and a 300,000-square-meter advanced research and development center costing three billion yuan.
"It's necessary to have self-branded cars to join the competition against overseas peers amid the rapidly growing Chinese market," said Zeng Qinghong, general manager of Guangzhou Auto, at the media day of the China (Guangzhou) International Automotive Exhibition yesterday.
"Cooperation is just one way for development but core competence is a must-have if you want to be a global player," he added.
The new factory is designed to turn out 100,000 cars annually with its first model being a mid-to-high-class sedan, due to be released in 2010. Capacity will be lifted to 200,000 units by 2010.
Guangzhou Auto said the new base would be its major platform for developing its own models, engines and transmissions.
The total investment would be funded through its profits, bank loans, cooperate bonds as well as a possible initial public offering, according to Zhang Fangyou, chairman of Guangzhou Auto, in an earlier interview.
The company will also focus on producing cars that are more eco-friendly, and energy efficient amid record high oil prices.
Yesterday the car maker offered a sneak preview of three concept cars including a four-door coupe, an AHEV crossover using hybrid electric technology, and the AEV concept car, an advanced electric vehicle.
Guangzhou Auto also plans to cooperate with other car makers, design studios and suppliers to accelerate development.
The company is the Chinese partner of Japan's Toyota Motor Corp and Honda Motor Corp, making sedans like the Camry, Odyssey multi-purpose vehicle, Fit and City compact sedans.
Domestic car makers are encouraged by the central government to develop Chinese cars.
China's top three car makers, including Shanghai Automotive Industry Corp, First Automotive Works Group and Dongfeng Automobile Group, will invest a total of 40 billion yuan to make Chinese-branded cars over the next five to 10 years, covering a complete product portfolio.