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BAIC Group's New Journey; Changhe Automobile's New Start

2016-01-18

Standing on the shoulders of giants, forging a path into the future! During the 12th Five-year Plan, the BAIC Group were repeatedly bathed in glory, and continued to exert its energies, rewriting itself at the end of the period and prepared to contribute to making the 13th Five-year Plan a reality. The BAIC Group will continue its comprehensive transition strategy, make major breakthroughs in its strategy to transform from a traditional manufacturer to a service-oriented and innovative manufacturer, strive to translate size into power and do its upmost to reach its "BAIC dream" to go global.


On December 27, the first stage of Phase 1 of the Changhe Automobile Jingdezhen Hongyuan Factory Construction Project was successfully completed, with synchronized commission of the new Changhe Q25 SUV model. At the same time, the foundations were laid for Changhe Automobile's Jiujiang Industrial Park, signaling the start of yet another strategic project.

The Optimization of the Regional Industrial Layout; Work at the End of the 12th Five-year Plan

Xu Heyi, BAIC Group's Secretary of the Party Committee and Chairman, has always emphasized the following: Full support for Changhe Automobile's development and unflinching commitment to the construction of the BAIC Group's Southern Base is the group's consistent policy. That the foundations for Changhe Automobile's Jiujiang Industrial Park were laid just as Phase 1 of the Changhe Automobile Jingdezhen Hongyuan Factory Project was successfully completed, demonstrates that the BAIC Group is taking advantage of its industrial strength and taking practical measures to improve its competitive ability in responding to the market, as well as signaling another significant achievement in Changhe Automobile's restructuring development and representing a new start for the company with its milestone strategic transition in the 13th Five-year Plan and strength upgrading.

The BAIC Group is responding to the regional grand development national strategy in the "One Belt, One Road" and Yangtze River economic belts by exerting all its effort to drive its Southern Base's industrial layout and comprehensively promote the major policy decision to engage in strategic cooperation with Jiangxi Province. The group is also responding to rapid developmental trends in new energy automobiles in China by promoting Changhe Automobile's strategic transition and committing itself to significant measures to establish Changhe Automobile as a strategic base for energy saving and environmental models and a developmental base for new energy automobiles. Without doubt, this will play an important role in Jiangxi Province and Jiujiang City leading to industrial upgrading, economic growth, an increase in employment, and a rich and complete automobile industrial chain.

According to reports, the Changhe Automobile Jingdezhen Hongyuan Factory will complete an annual output of 450,000 vehicles and 300,000 engines over the two phases. The first stage of Phase 1 will realize a factory with an annual output of 300,000 vehicles and production line construction with an annual output of 150,000 vehicles. By the end of 2017, the second stage of Phase 1 will be completed, with new production lines with an annual output of 150,000 passenger vehicles and a factory and production lines with an annual output of 300,000 engines will be constructed. By the end of 2018, Phase 2 will be complete, with another factory and production lines with an annual output of 150,000 vehicles added. At the same time, new products assembled and commissioned at the new factories will be promoted, with models covering sedans, SUVs and MPVs.

Changhe Automobile's Jiujiang Industrial Park Construction Project adopts first-class domestic construction procedures and in the future will possess an annual production capacity of 250,000 vehicles (including new energy automobiles). It is reported that Phase 1 of the Changhe Automobile Jiujiang Industrial Park will be completed and put into commission by 2017.

Developing the Regional coupling effects and deep cultivating "Double-brand" Strategy

Two years ago, Changhe Automobile joined the BAIC Group family. It underwent optimization and integration, and committed itself to becoming BAIC's Southern Base for assembling finished vehicles as well as an integrated producer, supplier, seller and researcher of engines, a leading domestic strategic base for energy saving and environmentally friendly vehicles, and a new energy automobile developmental base. The reorganization undergone this time has vastly accelerated the improvement of Changhe Automobile's core competitiveness while simultaneously promoting the development of the automobile industry in Jiangxi Province, and, even more importantly, reserving power to realize the BAIC Group's target  of a "Strong BAIC, Scaled BAIC, Global BAIC and a Harmonious BAIC".


Over the past two years, with the help of its "double-brand" strategy, BAIC has sorted out brand development planning with "Changhe Automobile" as its second main passenger car brand, and issued new brand identification which represents a significant milestone of Changhe Automobile's strategic transition. In terms of the management system, Changhe Automobile promoted crucial projects and adjusted the product sales structure to improve the enterprise's economic effectiveness via focusing on key products and key markets, constantly optimized its marketing organizational structure, strengthened network construction, reinforced network digital marketing, deepened client services and continuously enhanced satisfaction of both customers and employees.

At the same time as promoting the separation of passenger and commercial vehicles sales network, Changhe Automobile perseveres with its "dense coverage + refined cultivavtion" core network strategy. From 2013 to 2015, the company opened 130 first-class sales networks and 206 second-class sales networks, with a survival rate approaching 90%, and established an operations analysis mechanism and operations enhancement mechanism to bring about a comprehensive upgrade in quantity and quality of sales networks.

In terms of products, Changhe Automobile completed its coordination with the BAIC Group's R&D system, as well as successively importing six major platforms and 10 derivative car model products. In the future, Changhe Automobile will realize a shift from sedans to the comprehensive coverage of a series of products that cover SUVs, MPVs and new energy automobiles. At the same time, in terms of relative engine R&D, Changhe Automobile will cooperate with the excellent international engine R&D institution, the UK's Ricardo, in developing a direct injection engine. At present, the ignition of the first prototype has been completed. Changhe Automobile completed work on the calibrator’s performance optimization for other derivative products based on the K series engine, which are expected to go into mass production in August 2016.

The above achievements once again verify the success of the BAIC Group's reorganization of Changhe Automobile, and realize the following promises that Chairman Xu Heyi made back then: With the help of the BAIC Group's brand advantages, we will revitalize Changhe Automobile's confidence in development, and, relying on the group's industrial advantages, we will continue to give play to Jiangxi Province's regional advantages and governmental support to become bigger and stronger, and contribute even more to the development of the automobile industry in Jiangxi.

Setting off on a New Journey into the 13th Five-year Plan That Links the Past with the Future

In recent years the BAIC Group have bravely conducted reform and innovation, and accelerated the group's strategic transition and upgrading based around models of thinking, such as the Internet plus, to realize a transition toward market-oriented product orientation, and achieve a shift from away from a primarily manufacturing-based industrial structure to an industrial structure that simultaneously develops manufacturing and services. Moreover, taking advantage of the "Made in China 2025" strategy, and the implementation of the "One Belt, One Road" and the "Beijing-Tianjin-Hebei Region Integration" national strategies, the group will further translate size into strength and reach its "BAIC dream" to go global.

In 2015, the BAIC Group once again ascended into the Fortune Global 500 for the third year in succession, ranking 207 with operational revenue of USD 50,566 million. Compared with last year, the BAIC Group climbed 41 places in the rankings, continuing their "double-promotion" in both performance and rank.

The group's performance has benefitted from the BAIC Group's consolidation of traditional manufacturing, its positive response to the "Made in China 2015" strategy, and the promotion of exploration and cultivation of the Chinese equivalent of "Industry 4.0". In the first half of this year, the BAIC Group bucked trends in the stock market and maintained positive growth as growth in the entire automobile industry slowed in the new normal era. Beijing Benz and BAIC BJEV in particular were highlights of rapid growth on the back of their brand upgrading and innovative layout.

The development of new energy automobiles has already become a main player in the BAIC Group's future planning. In 2014, BAIC BJEV sold 5,510 purely-electric automobiles, representing year-on-year growth of 238%, to maintain its position as an industry leader, and entered into the top four in the world for sales of purely-electric automobiles, establishing a historic opening year in BAIC BJEV's new development. After moving into 2015, BAIC BJEV ushered in a period of even more explosive sales growth. From January to November, total sales reached 16,843 vehicles, representing year-on-year growth of 532%, and its market share climbed from 20.9% in 2014 to 24.2%, widening the gap between them and their competitors.

At the same time, the BAIC Group created a financial and production investment business section, established an assets management platform for the group, promoted an investment layout for the group in new innovative fields such as new technologies and new models, created a new innovative industrial and financial model for the automobile industry, promoted investment in the Internet of Vehicles, the automotive after-sales market, automobile finance, the reform of state-owned enterprises and other fields, and set out a forward-looking layout for its transition into the manufacturing services industry.

As Chairman Xu Heyi predicted: Benefiting from the favorable national policies to energetically develop the manufacturing industry and give special support to the development of the automobile industry; benefiting from the enterprise's collectivization, internationalization and globalization strategic positioning and implementation; and benefiting from the upgrading and development of our self-owned brands, joint venture brands and the whole value chain, the BAIC Group is already a Chinese brand that boasts international competitiveness and influence.

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