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FAW Car to Make Hongqi HQ3 in Changchun
(SinoCast Transportation Watch Via Thomson Dialog NewsEdge)CHANGCHUN, December 30, SinoCast -- FAW Car Co., Ltd. will be responsible for production of all-new Hongqi HQ3 cars in Changchun, the capital of Jilin, Northeastern China, as this plan to make it on the production platform of Crown is not agreed by the State Development and Reform Commission, China's macro-economy regulator under the State Council, the country's cabinet. As a result, Hongqi HQ3, scheduled to be launched into the Chinese market next February or March, has been postponed to appear in July 2006. Hongqi HQ3 is a luxury car on the platform of high-grade Crown car manufactured by Tianjin FAW Toyota Motor Co., Ltd., the venture between China FAW Group Corp. and Toyota Motor Corp. based in Tinjin, a port city near Beijing. Hongqi HQ3, showcased at Auto Shanghai 2005 with Hongqi concept car HQE this April, was estimated to share Crown production line previously to save costs. Currently, Hongqi HQ3 samples have started production in Tianjin. An insider close to FAW Group disclosed that Hongqi was China's self-developed auto brand and the State Development and Reform Commission was unwilling to make it in a joint venture. In addition, the second plant of FAW Toyota has high automation degree and production of Hongqi HQ3 there will influence FAW Toyota's production. FAW Toyota aims at reaching production and sales of 500,000 units and sales revenues of CNY 80 billion by 2010. Furthermore, China-made Crown is in hot sales now in the country and Hongqi HQ3 may start fierce competition with it in the high-grade car segment. The 12th generation Crown sedan rolled off the production line in Tianjin on March 21, 2005. High-grade Crown is honored the "car of 2006 in China" after being evaluated on three aspects including importance, value and leading position by Motor Trend magazine. All-new brand is the self-developed brand FAW Group is all along devoting to and has three models including Hongqi HQE, HQ3 and B-Class C301 based on the Mazda platform. Hongqi HQE is estimated to be put into production in 2008 with an annual output of only 20 to 30 units. It is aimed at competing with China-made Benz and China-made BMW 5-Series. Benz E280 is expected to be sold at the price of CNY 600,000 to CNY 650,000. Localization rate of China-made Benz cars will reach 40% and emission can reach Euro V Standard. China-made Benz output will be just 20,000 units initially and 80,000 to 100,000 units finally in accordance with demands. All-new Hongqi has been one of the strength models to help FAW Group reach production and sales of self-developed cars of one million units by 2009. FAW Car will make a contribution of 200,000 units and Hongqi series will contribute approximately 100,000 units. However, FAW Group now faces a series of difficulties to realize the goal by 2010. Its venture FAW-Volkswagen Automotive Co., Ltd. is rumored to suffer a huge loss this year. FAW Car cannot revive Hongqi brand although seeing hot sales of Mazda 6. The second plant and the third plant of FAW Toyota need huge investments and cannot make profits in a short term. (USD 1 = CNY 8.0724)
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