Parts companies follow the auto plant

In the context of restricting purchases and the limited market capacity of first-tier cities, accelerating the sinking of channels has become a common choice for car companies. In recent years, the Midwestern auto market, which has continued to rise rapidly, has enabled major car companies to change their strategies. At present, the second and third tier markets represented by the central and western regions are becoming new growth points for enterprises, while foreign brands, joint ventures, and local brands all focus their efforts in the next few years on the expansion of second- and third-tier networks such as the central and western regions.

In the past 2012, many car companies have thrown out plans to expand production in China to meet the high growth of the next round of the auto market, and the Midwest region has become the first choice for global car manufacturers to expand production.

Expand production in the Midwest

On April 16, 2012, Changan Suzuki’s second plant officially laid a foundation in Banan District, Chongqing City. The total investment is 2.3 billion yuan. After the first phase is completed, it will achieve an annual production capacity of 100,000 complete vehicles and 100,000 engines. Officially put into operation.

On May 28, Shanghai Volkswagen’s Xinjiang plant officially laid the foundation. The project will initially invest 170 million euros (about 1.4 billion yuan), and the first phase will have an annual production capacity of 50,000 vehicles, and it is expected to start production in 2015.

On June 6th, the fourth base of Shanghai General Motors officially settled in Jingang New District, Jiangxia District, Wuhan City. The total investment in the first phase reached 14 billion yuan, forming an annual production capacity of 300,000 vehicles. It is expected that it will be put into production in 2014.

On August 27th, the Changan Ford Mazda Automobile Chongqing base expansion project with an investment of 600 million U.S. dollars (about 4.8 billion yuan) was officially started. After the completion of the Chongqing passenger car base, the total annual production capacity will increase by 350,000, and the first new car is expected to be completed. It went offline in the second half of 2014.

On November 28, SAIC-GM-Wuling announced that the third base project was formally settled in Chongqing International Automobile City, Liangjiang New Area. The first phase of the project investment plan was 6.6 billion yuan, and it will build a production base with an annual output of 400,000 complete vehicles and 400,000 engines. It is expected to be completed and put into operation in 2015.

On January 8, 2013, Sichuan Hyundai Motor Co., Ltd., established by the joint venture between Nanjun Automotive and Hyundai Motor Co., Ltd., was officially unveiled. The first phase of the company's total investment was 5.4 billion yuan. The new plant will be completed and put into operation in June 2014. An annual production capacity of 160,000 commercial trucks, 10,000 commercial buses, and 20,000 heavy-duty engine production capacities that meet Euro IV emission standards are established.

Judging from the above long list of projects, from the end of this year to 2015, the production capacity of over one million vehicles and hundreds of thousands of engines will be formed in the central and western regions, and this series of expansion projects will be completed. Behind this is the enthusiasm of the major car companies to seize the future market.

“We believe there is great potential for car sales in western China,” said Christian Kolingler, sales director of Volkswagen AG. “The new plant in Xinjiang is just part of our strategy to move to the west.”

The Xinjiang plant is not only the first time for Shanghai Volkswagen to invest in the country in its national layout, but it is also the first car production and manufacturing project introduced in Xinjiang. The future public Xinjiang plant will mainly produce small and medium-sized products suitable for the western market. Market analysts said that after the establishment of a new factory in Urumqi, Xinjiang, the public may further increase investment in western China.

Increased competition in secondary and tertiary markets

In fact, recognizing that “going to the west” is not only a VW that is crucial for seizing the commanding heights of future competition.

When interviewed by the media earlier, Chen Hong, chairman of SAIC-GM-Wuling, also stated that in the recent years, the Midwest has become the fastest growing regional market in China’s auto market. In the future Midwest, due to the large population base and large economic aggregates, the number of cars will remain. The generally low, rapid growth and other characteristics will undoubtedly become another driving force for the development of China's auto industry. The location of the new base of SAIC-GM-Wuling for a period of two years was finally determined to be located in the central and western regions. It is also the future of the Midwest market.

"We expect this year's sales volume to reach 1.4 million units, and the production capacity is currently not fully met. The two bases in Liuzhou and Qingdao before us allowed us to achieve a north-south linkage, but in the future, the potential for mini-vehicles in the central and western markets is even greater. Therefore, we need to establish a production base in the west to meet local needs.” Liang Xiaodong, SAIC's public relations manager, also told reporters that the site selection for the third base is mainly due to the layout of national production capacity. The establishment of the third base in Chongqing will make SAIC GM Wuling formed a joint production pattern in the north, south, and mid-west regions.

At present, the average coverage of SAIC-GM-Wuling nationwide is 50%, but the Midwest is a relatively weak region. Therefore, strengthening the excavation in the Midwest region will be the focus of the company's future development. In addition, SAIC-GM-Wuling Liuzhou Base currently has an annual vehicle production capacity of 800,000 vehicles. After the completion of the second phase expansion of the Qingdao plant last year, the annual production capacity of the vehicle has increased to 500,000 vehicles. Together with the 400,000-year production capacity of Baojun Base, which was formally completed and put into operation on November 18 last year, the total capacity of SAIC-GM-Wuling is currently 1.3 million units, which is 700,000 units from the scale of 2 million units in 2015, and that of the third basement The completion will help SAIC-GM-Wuling to achieve a production capacity of 2 million at the end of the 12th Five-Year Plan.

For the recent car manufacturers competing in the expansion of production lines in the central and western regions, the Deputy Secretary-General of the National Passenger Vehicle Market Information Association, Cui Dongshu analyzed that although in the past, the mid-west and other secondary and tertiary markets were the main positions of domestic independent brands, but in recent years, many manufacturers In order to increase the layout of the western market, with the continuous exploration of joint venture brands and luxury car brands, under the combined effects of many policy guidance and market demand orientation, the secondary and tertiary markets represented by the central and western regions will become the future development of automotive companies in China. The top priority is that competition in the second and third-tier markets is also becoming more and more intense.

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