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Thursday, February 15, 2024

Oped: The Chinese car industry explained

China remains the largest producer of passenger cars in the world with an annual production greater than Japan, Germany and the United States combined.

The automotive sector in Pakistan is experiencing an influx of Chinese cars and SUVs. The newest model to reach showrooms is the Changan Alsvin, a sedan car that is competing against the Toyota Yaris and aged Honda City. In the hatchback segment, United Motors has launched the Alpha, a 1000cc car that is significantly more affordable than its rivals. Consumers are also excited to see the MG HS, a crossover competing against the Kia Sportage and Hyundai Tucson.

China remains the largest producer of passenger cars in the world with an annual production greater than Japan, Germany and the United States combined. The unprecedented growth of China’s auto industry has been fueled by the demand from the local market. So many new cars are bought in China that people wanting to register one in Beijing have to apply for a number plate through a lottery system. For every two-thousand people that apply, only one is allotted a number plate!

Read more: Cheapest 1400cc Sedan “Changan Alsvin” Hitting Pakistani Markets

Despite this massive local demand, Chinese car companies have been gradually increasing their exports as well, selling mainly in developing countries in South America and the Middle East. They have started setting up assembly plants in Pakistan as well, by availing incentives provided by the Government in the Automotive Development Policy 2016-21.

Chinese economy cars suit developing markets because they are are much cheaper to buy and run than their Japanese and Korean rivals. However, they often lack the latest technology and safety features and underperform in international crash-test ratings.

The “big four”

Four state-owned companies dominate China’s auto industry. Known as the ‘big four’, they are SAIC, Dongfeng, FAW, and Changan. Until 2018, all foreign manufacturers wanting to sell cars in China were bound by a 50:50 rule, wherein they had to form a joint venture with a local partner and share their knowledge.

SAIC Motor Corporation Ltd. is headquartered in Shanghai and has the largest production volume of all Chinese auto manufacturers. SAIC has been manufacturing cars since the 1940s. During Chairman Mao’s rule, they made cars for senior government officials, like the Shanghai SH760 which was based on the Mercedes-Benz W180.

Read more: Javed Afridi teases spectacular 1500cc MG 6 sedan for Pakistan

SAIC has joint ventures with General Motors and Volkswagen as well as its own subsidiaries including MG and Roewe. MG is an iconic British sports car maker that was bought by the Chinese in 2007 and now makes hatchbacks and crossovers. In addition to the MG HS crossover which comes with a 1500cc turbo engine, the company plans to launch an electric crossover called the MG ZS EV in Pakistan soon.

Dongfeng Motor Corporation which is headquartered in Wuhan is China’s second-largest vehicle manufacturer. The company has formed joint ventures with Kia, Honda, Peugeot-Citroen, Renault, and Nissan. Dongfeng started out in 1969 as a commercial vehicle manufacturer but in the last decade has shifted its focus on passenger vehicles. Ghandhara Nissan Limited offers Dongfeng light and heavy-duty trucks in Pakistan.

Read more: Malaysian SUV Proton X70 launched in Pakistan

FAW Group Corporation has headquarters in Changchun and is famous in China for producing the Hongqi, China’s first and most luxurious passenger car. Hongqi means ‘the red flag’ and the Hongqi CA72 sedan was used to ferry around top government officials and foreign dignitaries including the American president Richard Nixon on his visit to China. The latest model Hongqi comes with a 6000cc V8 engine and costs a little over a million US dollars!

FAW’s other cars are a lot more affordable than the Hongqi. A selection of passenger and commercial vehicles is sold in Pakistan, including the FAW V2 hatchback which is based on the 1st generation Toyota Vitz. FAW has joint ventures with Toyota, Mazda, and Audi.

China’s fourth-largest carmaker is Changan Automobiles which is headquartered in Chongqing. The company has joint ventures with Ford, Peugeot-Citroen, Mazda, and Suzuki. Changan started out as a military equipment factory which later began producing the Changjiang 46 – China’s first ‘Jeep’. Changan is selling many vehicles in Pakistan including light pickup trucks, vans, and the Alswin sedan.

Read more: List of Cheapest Cars: Cars Available Under 2 Lac in Pakistan

Another Chinese car company that is worth mentioning is Geely. Though Geely is not part of the ‘big four’, it is China’s largest privately-owned car company with headquarters in Hangzhou. The company produces cars under the Geely Auto and Lynk & Co brands. It also partly owns the British company Lotus, Malaysian company Proton, and Swedish company Volvo. The Proton X70 SUV which has just been launched in Pakistan has been jointly developed by Geely.

Now that the Federal Cabinet has approved a new policy for four-wheeler Electric Vehicles (EV), more Chinese brands are expected to enter the Pakistani Market. Consumers are welcoming this change and are eager to get behind the wheel of new cars launching this year.

Read more: Op-ed: Electric Vehicles (EVs) in Pakistan

Danyal Haroo is a computer science student who enjoys writing about science and technology. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.