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BAIC Group Wins the 2015 "Annual Enterprise" Grand Award at the Automobile Industry Oscars

2015-11-22

On November 19, it was announced at the 14th Automobile Industry Oscars that the BAIC Group had won the "Annual Enterprise" award for the Group's swift improvement in market performance and its outstanding achievements in self-owned brand innovation.

The "Automobile Industry Oscars" is an annual automobile awards ceremony held by the Southern Metropolis Daily with voting conducted by industry experts and public consumers. With 13 years of experience, the Oscars has become an authoritative and influential automobile awards ceremony in China.

For the BAIC Group, receiving this award acts as an incentive to continue their hard work, and also an encouragement for what they have achieved to date. The Group will continue to closely carry out the national development strategy, and comprehensively initiate its transformation from a traditional manufacturer to a service-oriented and innovative manufacturer, to realize the shift from the traditional economies of scale to the construction of Internet economy model and create a brand new business model, while establishing itself as a benchmark independent brand enterprise, and a brand of "intelligently made in China" automobiles.

In a Year of Structural Transition, the BAIC Group Saw an Outstanding Upward Trend in Performance

BAIC Motor has just completed its fifth year of operations, with its self-owned brand coming into existence relatively late and having only been going for a short period of time; however, after a lot of hard work, the Group's self-owned brands have achieved outstanding results in growing. Starting from scratch, it has produced 300,000 self-owned brand cars in just 45 months. Its subsidiary Senova brand has already become a new favorite in the passenger car market. Weiwang is a rising star in the microcar market, while BAIC SUV stands poised with its BJ40 model, and its new energy automobiles have become a hit in the Chinese new energy automobiles market.

According to the 2015 third quarterly report issued not long ago by BAIC Motor Corporation Ltd.(1958.HK, hereinafter referred to as "BAIC"), the company enjoyed outstanding business performance thanks to its main operations' strategic layout, realizing an income of RMB 61.6 billion in the first three quarters of the year, representing a year-on-year growth of 44.5%.

Of that growth, BAIC brand's (including the Senova, BAIC Motor and Weiwang series) third-quarterly sales volume enjoyed a year-on-year growth of 1%, reaching 57,000, with the SUV and MPV models' sales volume showing strong increases that hit a year-on-year growth of 411% and 117% respectively. Its self-owned brand of new energy automobiles also enjoyed a sales volume of 5,035, representing a year-on-year growth of 923%, with sales in September alone breaking through the 2,300 barrier, hitting a new historic peak.

The BAIC Group's another main brand, Changhe Automobile, also continued its fierce developmental momentum from 2014, achieving a year-on-year growth in sales of 12.3% in the first half of the year.

On top of this, BAIC's Beijing Benz operations maintained strong growth, with a third-quarterly sales volume reaching 72,200, for a year-on-year growth of 91.2%. On the back of continued promotion of this brand's new models and its existing market foundation, future hopes of maintaining such excellent sales look promising.

Transformation and Upgrading; Investing in Innovation

Innovation, coordination, "green" production, opening up and sharing represent the five primary developmental concepts laid out in the 13th Five Year Plan. Of these, "innovation" is not just ranked first in the CPC Central Committee's Proposal on Formulating the Thirteenth Five-year Plan on National Economic and Social Development, but is also specified as being "the main driving force behind development" and was mentioned 71 times, coherently illustrating the importance of "innovation" over the next five years of development.

The BAIC Group has always looked to develop via "innovation". At the beginning of this year, the BAIC Group issued its brand strategy of "Creating and Innovating the Future", which also demonstrates the Group's new directional strategy on the road towards its "shift from a traditional manufacturing enterprise to a service-oriented and innovative manufacturer". Over the past year, the BAIC Group has invested a lot of time and energy into research and development on its self-owned brand products, new energy automobiles, intelligent automobiles, and other fields and subsequently enjoyed outstanding results.

Ever since the BAIC Group brought out its first self-developed Senova D70 based on the Saab platform, its Senova series have successively embraced and expanded into the sedan, SUV and new energy automobile models. In the first half of the year, the Senova X65, Senova D50 and other models have become the main driving force behind the growth in BAIC's self-owned brands' performance. In the recently published J.D. Power 2015 China Initial Quality Study (IQS), BAIC's Senova D50 ranked first in the medium-based automobile market segment.

According to reports, at the up and coming 2015 Guangzhou International Automobile Exhibition, the BAIC Group will follow up on the X65 with two new SUV models in different segments of the market, the Senova X55 and BAIC's first A0-segment SUV--the Senova X25.

As an important section for the BAIC Group's transformation and upgrading, new energy automobiles experienced a period of leapfrog development in 2015. On the back of a series of models, such as the EV150, 160 and 200, the Group emerged as the leading player in the domestic purely-electric automobile market. According to statistics, BAIC BJEV reached a sales volume in purely-electric automobiles of 13,815 from January to October of this year, once again consolidating its position as the giant of domestic purely-electric automobile sales, while moving into the top four in sales of purely-electric automobiles worldwide. It is anticipated that by 2020, BAIC BJEV will have completed its five large production bases in Beijing, Zhuzhou, Qingdao's Laxi, Jiangsu's Changzhou and Jiangxi's Jiujiang. At the same time as driving the rapid development of production of new energy automobiles, BAIC BJEV also began its "Healthy Blue Skies for Everyone A+ Plan", which adopts an "ecosystem" model to amplify resource integration of leasing transactions and drive the development of an information sharing platform. According to other reports, the BAIC Group is currently carrying out comprehensive adjustments and planning aimed at the new energy business, with operations expanding to many of the Group's self-owned brands' business sections.

After Changhe Automobile was combined into the BAIC Group in 2013, it became an integral part of the Group's double-brand strategy, enjoying pleasing development and monthly increases in production and sales. At present, it enjoys a total annual output of 270,000 automobiles and 150,000 engines (including Changhe Suzuki), as well as production qualification for joint venture brand and self-owned brand sedans, microcars, new energy automobiles and engines. Changhe Automobile's 3,600 mu base construction project in Jingdezhen represents the first strategic project undertaken by the BAIC Group and Changhe Automobile since they were restructured. Total investment for the project stands at RMB 14 billion and has a planned annual output of 450,000 vehicles and 300,000 engines. When completed, the base will produce the full range of cross-type passenger vehicles, including A0, and A- to B-segment sedans, SUVs, MPVs, new energy automobiles and other models.

π Plan; BAIC's Drive Over the Next Five Years

Over the past five years, BAIC has established a series of complete industrial chains, and repeatedly reinvigorated the development speed of BAIC Motor, Beijing Hyundai and Beijing Benz by improving its comprehensive strength. On the back of the "Internet+" and "Made in China 2025" strategies, the BAIC Group put forward its plans for the following five years. By 2020, BAIC Motor will advance into the top three self-owned brands on the domestic market, and Beijing Benz will strive to top the domestic luxury car market, while Beijing Hyundai will enter into the top four in the domestic joint venture market. This five-year program of action that takes 314 as a key concept is known as the π Plan.

In order to realize the target of rising into the industry's top-three self-owned brands, over the next five years BAIC Senova, BAIC Weiwang and Changhe Automobile will become three main pillars in the BAIC Group's self-owned brand camp. The Senova brand will successively release its first- and second-generation models, with the second-generation model adopting the Benz platform and high-performance power-assembly technology.

The BAIC Group's cooperation with Benz and Hyundai is seen as a model example of international joint venture cooperation for Chinese automobile firms, and has seen key breakthroughs in terms of stock equity and value chain cooperation. In just the past half year, Beijing Benz has realized comprehensive successes in the introduction of new products, establishing a platform and improving its output. With the Mercedes Benz M270 engine coming into commission, the domestically produced GLA-segment high-end compact SUV rolling of the production lines, the NGCC factory coming into operation, the domestically produced standard wheelbase C-segment model rolling of the production lines, and the engine factory second phase project being officially completed and coming into operation, Beijing Benz has seen its development in the domestic market thrive. In the future, Beijing Benz will introduce even more Benz products and construct an even more sophisticated product structure. According to reports, the GLC came into commission at the Beijing Benz factory during the fourth-quarterly period this year. On top of this the Benz C350 plug-in hybrid also came into production at Beijing Benz, and is planned to enter the market this month. This is the first hybrid model that Beijing Benz has officially manufactured and released.

As an integral part of the BAIC Group's joint venture cooperation business, Beijing Hyundai's future layout has already taken initial shape. Beijing Hyundai will emphasize "innovation plus technology" and "products plus services" as its new points of growth for enterprise development, while adjusting its market strategy to meet an increase in the speed of product development and brand upgrading in the automobile market, with 5-6 completely new models planned for the future to offset gaps in market segments. Beijing Hyundai's production base will spread to Cangzhou and Chongqing, and penetrate deep into the market in Western China taking advantage of Chongqing's position as a strategic intersection between the "One Belt, One Road" and Yangtze River economic belts.

Also worth mentioning is BAIC Group’s another primary business section: general aviation. Relying on its subsidiary, Beijing General Aviation Co., Ltd. (hereafter referred to as BGAC), the BAIC Group made the successful move into the general aviation industry and enjoyed outstanding progress. In October of this year, BGAC's P750 aircraft manufacturing base project settled in Changzhou, commencing the construction of the BAIC Group's general aviation industry base in Eastern China. According to reports, BGAC's Changzhou Aircraft Manufacturing Company Project will have an overall floorage of 46,000 square meters, and will primarily construct a base for the manufacture of P750 planes, and conducting of test flights, delivery and maintenance services. Moreover, it will gradually develop in scope into the general aviation industrial chain with anticipated overall investment reaching over RMB 5 billion within five years.

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