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After launching the "Liberation 501" light truck pilot trial, FAW-GM Light Commercial Vehicles Co., Ltd. ("FAW") began to seek greater space for development in China.
On September 2nd, when the joint venture company was just listed at the age of "age of year," the president of FAW-GM, Daddwick, announced a new expansion plan in Beijing. The production capacity of the Harbin plant will increase from an annual output of 60,000 light trucks to 10 Ten thousand vehicles, plus the Qujing plant in Yunnan, will increase FAW GM's capacity in China to 200,000 next year.
Regarding FAW GM's formulation of the introduction of the general commercial vehicle brand GMC in the second half of the year, Dedemon explicitly denied that “the existing products are still based on the light commercial vehicles of FAW Group. In the future, we will also consider introducing some models from GM. Or technology, specific plans will be based on market conditions."
"Our long-term goal is to become the world's first light commercial vehicle company." Although the business in China has only just begun, it did not prevent Dedex from revealing his ambition to reporters. For him and GM standing behind him, taking advantage of FAW's springboard to enter commercial vehicles, it has strategically taken the initiative.
One year harvest
Dideway is very satisfied with the transcripts of this year. Through improving the after-sales network and improving the logistics system, the timely rate of FAW-GM parts supply has approached 90% from the previous 50%. In addition, with the assistance of the general engineer, the FAW-GM joint venture company was launched only five months after it was listed. The first light truck product - Liberation 501.
As a "strategic" model, Liberation 501 was put into production in both Harbin and Qujing. However, Dideway did not formulate a huge sales plan for Liberation 501. On the contrary, taking into account still need to go through a rigorous quality control processes, Di Dewei only allowed the liberation of 501 new products before the factory mass production in the first year of "Limited Edition" 5000.
"Our goal is to make the liberation 501 satisfied with the customers in the process of use." FAW-GM hopes to gradually occupy the market through quality improvement and value enhancement to form a user reputation.
In order to promptly gather opinions from the frontline of the market, Daddwick selected 13 dealers nationwide to form a “distributor committee†in November last year. The latter responded to the company’s opinions on products and services through monthly regular meetings.
The introduction of GM’s product development processes and manufacturing systems that meet global standards is the beginning of the “universal†transformation of Dover's FAW plant. FAW also used the "foreign aid" of GM, a new joint venture partner, to reintegrate its production resources and strive to enhance the competitiveness of the company's systems.
Although FAW's light commercial vehicles include production bases such as Yunnan Automobile Hongta and FAW Harbin Light Depot, which are distributed throughout the country, light commercial vehicles have always been FAW's shortcomings due to lack of resource integration. In terms of production and sales volume, FAW light commercial vehicles ranked fifth in the country below Futian, Dongfeng, Jianghuai and Jiangling.
With the help of the GM joint venture to restart the light commercial vehicle project, FAW soon integrated Yunnan Hongta and FAW Harbin into the joint venture. In the year of the establishment of the joint venture company, the production and sales volume of FAW's General Motors soared from 66,000 units before the joint venture to 94,000 units, and the ranking of the industry rose to the fourth place. The next step of FAW-GM's plan is to promote the unified planning, unified procurement and unified sales allocation of the two factories so as to reduce the parts procurement and production costs.
Universal Abacus
In the year he worked in the position of General Motors President of FAW, most of Dedward's work was to “behind the scenes†such as improving production processes, improving product quality, and after-sales service, which were not easily perceived by outsiders. Since the establishment of the joint venture company has yet to announce plans to import generic brands and products, many media have mistakenly believed that this joint venture partner is only a foreign steward employed by FAW.
According to the joint venture agreement signed at the end of August last year, FAW GM is a typical joint venture: Chinese and foreign shareholders each have a 50% share, registered capital of 1.2 billion yuan, and a total investment of 2 billion yuan, of which FAW is a subsidiary of Harbin and The land, plant and equipment of the two bases in Qujing, Yunnan, are funded, and General Motors has invested in technology and cash.
In the high-level personnel structure, FAW General's practice of using “the chairman of the Chinese side and the foreign leading operation†also coincides with the industry’s “unspoken rules†and hopes to balance the interests of both Chinese and foreign parties.
According to public information, Xu Jianyi, general manager of FAW Group, personally assumed the chairmanship of the joint venture company, and Gan Wenwei, president of General China, served as vice chairman. In terms of specific management, General Motors dispatched Dedve, director of the General Motors Commercial Vehicles Research Department in China, and the executive vice president was Liu Liyan, who was dispatched by FAW. It is reported that Liu Liyan served as director of the Harbin Light Depot and Party Secretary of FAW Light Car Company.
“In the key positions of joint ventures such as product development, parts procurement, marketing, quality control, and financial management, there are general-purpose relevant personnel involved. For example, the Americans dominate in the improvement of quality, while the sales are mainly in China. The person-in-charge leads.†FAW-GM insiders told reporters that drawing on the common management model and production experience is crucial for improving FAW-GM’s “soft powerâ€.
In exchange, GM's biggest gain is: With the help of FAW's powerful springboard, it has successfully entered the domestic commercial vehicle market with huge potential. "Last year, the sales volume of light trucks in China was 1.5 million units. We expect this figure will increase to 1.8 million this year, and there are few such large market increments in the world."
Dideway acknowledged that China's light commercial vehicle market has broad prospects, but "it is still necessary for rice to eat one by one".
In the product line of general commercial vehicles, high-end light passengers and pick-up trucks are mostly, while light-card products that meet the needs of the Chinese market are almost absent. Analysts believe that prior to the introduction of generic brands and products, Daddwick will first upgrade the joint venture's production, sales, and aftersales systems to a level that meets common global standards.
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