State-owned automaker reaps rewards from product transformation, upgrade

With many of the world's automakers encountering a sluggish market amid the headwinds of the COVID-19 pandemic, Chongqing Changan Automobile Co Ltd is an exception and has made notable breakthroughs in sales in the first five months.

The automaker, a subsidiary of China North Industries Group Corp－a leading arms producer－saw its five-month export volume jump 11 percent on a yearly basis to 21,500 units, including sedans and sport utility vehicles. Sales soared 54.3 percent and 32.0 percent year-on-year to 174,012 units and 159,557 units in May and April, respectively.

This performance both at home and abroad was due to efforts to transform and upgrade product structure, operational modes and efficiency, as well as growing investment in the area of developing new energy vehicles and intelligent systems, industry experts said.

Shi Haifeng, general manager of Changan Auto's overseas business unit, said the company's full work resumption, new vehicle launches, government measures to stimulate auto consumption and a rebound in consumer confidence were contributing factors to its recent success.

"Chinese auto brands have made great strides thanks to improved quality and after-sales services, and sometimes they even outperform certain global names," Shi said, adding that many of the company's exported vehicles were shipped from Chongqing to Shanghai via inland waterways.

To minimize impact from the COVID-19 pandemic, the State-owned company enhanced contact with domestic and foreign suppliers to coordinate delivery times of various components and ensure normal operations and timely deliveries.

Eager to compete with other established rivals both at home and abroad, Shi said Changan Auto has adopted more digital technologies and formed partnerships with companies in other sectors to upgrade its product range amid a wider industry shift toward developing smart connected vehicles.

"The future development trend of the auto industry should be the deep integration and collaborative innovation between traditional automakers and internet companies," he said. "All the steps are digitally synchronized to ensure execution and complete alignment with customer demand."

A number of global players from Germany, France, Japan and the United States have already digitalized their entire value chain, from product design and research and development, through to logistics, production and related services.

Backed by 15 manufacturing bases and 35 auto and engine plants around the world, Changan Auto now has 12,000 technicians from 24 countries, and has established R&D facilities in Italy, Japan, the United Kingdom, the US and Germany.

Even though China's January-May automobile output and sales totaled 7.79 million and 7.96 million units, respectively, a year-on-year drop of 24.1 percent and 22.6 percent, the country's auto market stepped up recovery in May, with both production and sales showing double-digit growth, said the China Association of Automobile Manufacturers.

Total automotive output stood at 2.194 million units in May, up 18.2 percent on a yearly basis, and sales hit 2.187 million units, up 14.5 percent. In terms of passenger cars, contraction came to an end both in terms of production and sales last month, with 11.2 percent and 7 percent growth registered, respectively, or 1.66 million and 1.67 million units.

To maintain solid economic fundamentals, the government has emphasized the importance of focusing on the "six priorities" of safeguarding employment, people's livelihoods, the development of market entities, food and energy security, the stable operation of industrial and supply chains and the smooth functioning of society.

Chen Bin, executive vice-president of the China Machinery Industry Federation in Beijing, said it is vital for China to boost exports in sectors such as passenger vehicles, electronics, furniture, clothing and foodstuffs as they involve large numbers of upstream and downstream industries with millions of industrial workers.

A healthy growth of the automobile industry can benefit rubber material providers, refinery companies, glass, tire, steel, sensor, gearbox and battery manufacturers, as well as road project contractors, digital maps and insurance services, Chen added.