l        Ford Motor Company is to invest US$490m in an assembly plant in China to produce the next-generation Focus compact car, which it plans to sell worldwide.  The US motor giant will partner with Mazda and Chang’an in a joint venture in Chongqing, scheduled for completion by 2012.  This will be Ford’s second plant in Chongqing.

l        A US supplier of clean electric transportation and storage technologies is to establish two joint venture companies with Shenzhen Goch Investment (SGI).  SGI will invest US$10m in a joint company to manufacture and assemble electric vehicle charging equipment, and US$5m in a company to market and sell these charging systems in China.

l       The president and CEO of General Motors, Frederick Henderson, said that China has surpassed US to be the largest market for the automobile giant.  For the first nine months of 2009, GM’s sales in China totalled almost 1.3m vehicles, 56% up on the previous year.  Sales in September were at an all-time monthly record.  GM, the largest vehicle producer in China, last month launched a wholly owned science lab in Shanghai, which will focus on advanced propulsion technology, battery cells, mega-city safety resource, advanced vehicle development and light materials, GM said.

         More information about market research in the Automotive sector can be found at: http://www.b2binternational.com/China/b2bsectors/automotive.php 

Sources: CBBC, Xinhua, Financial Times, Wall Street Journal, FCO Country Updates and other news sources.

l          The US networking and communications technology company Cisco has entered into a strategic relationship with Chongqing municipality, under which the US company will work to advance Chongqing’s IT manufacturing industry, promote innovation and R&D in green technologies, and support China’s ‘green growth’ strategy. Cisco and Chongqing will work to increase investment, support local innovation and sustainability, and accelerate the internationalisation of local enterprises.

l          The dominant Chinese search engine Baidu has announced that many of its popular services will be pre-installed on next-generation mobile phones from the local carrier China Unicom. Baidu’s services including its internet search, free music download search and message forum will all be pre-installed on 3G handsets, Baidu said. Baidu will also provide search capabilities for mobile internet web sites run by the carrier, which planned to launch the iPhone in China in October.

         For more about our Information Technology market research services in China and Asia, please click here.Alternatively, to find out more about our Telecommunications sector market research, click here.

Sources: CBBC, Xinhua, Financial Times, Wall Street Journal, FCO Country Updates and other news sources.

China’s manufacturing sector expanded to a 17-month high in September as the country’s recovery continued, according to the China Federation of Logistics and Purchasing.  The monthly purchasing managers’ index rose to 54.3 in September, from 54 in August, CFLP said.  A figure above 50 indicates expansion.

Sources: CBBC, Xinhua, Financial Times, Wall Street Journal, FCO Country Updates and other news sources.

The global consumer goods manufacturer Procter & Gamble is to build a US$248m manufacturing base in Tianjin.  P&G plans to develop its sanitary products plant in Xiqing district into its largest manufacturing base in Asia Pacific, and possibly the world.

Meanwhile, a recent survey by Ruder Finn shows that 50.3% of consumers in Greater China claim they will not let the global recession affect their purchase of luxury consumer goods. These same respondents also appear to be extremely loyal, with 89.3% saying they will stick to their preferred luxury brand despite the economic downturn.

Sources: CBBC, Xinhua, Financial Times, Wall Street Journal, FCO Country Updates, Ruder Finn, Harvard Business Review and other news sources.

China is expected to face a labour shortage in four to five years, especially in jobs that require unique skills.  Shortages will be worst in factory jobs currently held by migrant workers and skilled workers, such as those who make toys.  Due to the one-child policy, the number of people of working age (15-60 years old) will reach its peak by 2013 and 2014, and after that decline, said a spokesman for the National Development and Reform Commission.

In other news, some 300 million people now living in rural areas of China will move into cities in the coming 15 to 20 years, said a senior Chinese official last month.  The fast pace of urbanisation will create at least Yn1tr in annual investment opportunities in water supply, waste treatment, heating and other public utilities in the cities, said Xu Zhongwei, deputy policy director of the Ministry of Housing and Urban-Rural Development.

Sources: CBBC, Xinhua, Financial Times, Wall Street Journal, FCO Country Updates and other news sources.

Following our last blog post – a sector update on the Chinese automotive industry – we spotted an interesting article in last week’s AdAgeChina entitled “Great Wall is China’s Turtle in the Race to Build Global Car Brands” by Yang Jian of Automotive News China.

Great Wall Motor Co. is a small Chinese automaker. But its recent achievements provide some food for thought for its domestic peers who may be seeking to enter new or more developed markets such as Western Europe and America.

Between 2005 and 2007, a number of own-brand Chinese passenger vehicle brands – including Chery Automobile Co. and Zhejiang Geely Holding Group Co., Hebei Zhongxing Automobile Co. and Changfeng Motor Co. – displayed their vehicles at overseas auto shows.  In addition to participating in foreign auto shows, Shengyang Brilliance Jinbei Automotive Co. sent its vehicles for crash tests in Europe in 2006 and 2008, but the ratings received were very low.

After recognising the difficulties of meeting the stringent safety and emission standards of the European and American markets, most of these Chinese companies had, by late 2008, given up on any immediate-term plans to introduce their cars into these markets.  Some have this year looked into the possibility of merger and acquisition opportunities, which would effectively be a ‘short-cut’ to enter these new markets but, to date, no meaningful progress has been made in this area.

Great Wall, however, has adopted a different approach and strategy – one which can be summarised as more low key but more persistent – hence the article’s reference to ‘the hare and the tortoise’ fable.

Great Wall sold about 125,000 vehicles in 2008, with around half being exported to other developing markets.  It has yet to send its products to exhibitions in developed countries.

Instead, the company has been focusing its efforts on building, improving and upgrading its vehicles so they will meet the standards of these developed automotive markets.

In June of this year it began exporting three vehicles to Australia after certifying them for the market there.  In September it has managed to certify four of its models for the European Union – and with it has become the first domestic Chinese auto manufacturer to clear all the regulatory hurdles necessary to launch its vehicles within this market.  Great Wall has also, this year, begun preparations to design cars in line with U.S. safety and emission standards, with the aim of certifying them for the American market.

While its vehicles may be certified for the European market, Great Wall must still focus on building a suitable distribution network and put much effort into marketing before it can sell its products there.  But few would deny that with the slow, steady and solid progress it has been making of late, the company seems to be well ahead of its contemporaries in the race to crack Western auto markets.

For more information on our research experience in the automotive industry, please visit: http://www.b2binternational.com/China/b2bsectors/automotive.php

Chongqing Energy Saving and New Energy Automobile Alliance has been established in Chongqing.  It is headed by the vehicle maker Chana, and comprises around 30 car makers, automotive component manufacturers and research institutions.  The Chongqing government is providing support, including Yn1 billion (£99 million) in funds and facilities.  The alliance’s aim is to increase Chongqing’s competitiveness in energy saving and vehicles using renewable fuels.

Sources: CBBC, Xinhua, Financial Times, Wall Street Journal, FCO Country Updates and other news sources.