Brent Co / Brent Co | March 22, 2015 11:56
Modern car manufacturing in China with BAIC
Over the last decade, Chinese car marques have evolved in ways unimaginable. Part of the advancements were brought about by technology transfer from joint venture partners or purchase of technologies from embattled carmakers in Europe. Newcomer BAIC brings us to Beijing to get more acquainted to company behind the four letter brand that sounds more two-wheeled than four.
Chinese State-owned BAIC was founded in 1958 as Beijing Auto Works with their first "home-made" car named "Jing Gang Shan" sedan, named after a famous mountain range in Jiangxi province. The famous mountain range is also known as the birthplace of the Chinese Red Army.
The Chinese automaker formed the first Sino-foreign joint venture with Chrysler in 1983, specifically their Jeep brand and AMC to produce off-road vehicles based on the venerable Jeep Wrangler. It later formed other alliances with Daimler, Hyundai and Cummins, which further improved its competence and technology.
However, it was not until 2010 that BAIC officially established their own brand after purchasing patents and technologies from embattled Swedish carmaker Saab the year before. It officially offered cars with the BAIC brand in early 2012, a Mercedes-Benz B200-based E Series hatchback otherwise known as the A113/A115.
In an effort to come up with more original designs, BAIC has hired former Pininfarina designer Leonardo Fioravanti (Ferrari Daytona, Dino designer) in 2012 as their Chief Design Officer based in Milan, Italy. The following year, the Chinese automaker also hired Australian designer Peter Arcadipane from Mercedes-Benz.
In 2014, BAIC Group has sold 2.4 million vehicles in China alone, with international sales of BAIC branded vehicles reaching 600,000 units. They were also ranked 248th among Fortune’s 500 Global Companies; their second consecutive year to be in the prestigious list.
Global is the way to go
Wanting to enter the global stage, BAIC Group specifically formed a new company called BAIC International in mid-2013 to handle its international operations as opposed to just setting up a department composed of 3 to 4 people to handle things. The company is led by the charismatic Dr. Dong Haiyang and other executives from subsidiary Foton, which had enjoyed success in the international market.
BAIC International also set sights on a bold plan to "take over" a mid-sized European car brand. It was to hasten their international expansion to utilize the facilities as a foreign production hub.
Dong shared his three-headed formula for the success of BAIC International:
Dong believes that a successful automotive brand cannot have a single model solution for all markets. "A car is not a mobile phone," he says. BAIC vehicles have to tailored to meet specific market needs and tested before being sold in showrooms.
Service and support
Without proper support, a brand will not develop loyal customers. Since some Chinese automakers have left a bad taste with Filipino car buyers leaving them virtually alone with no service and support, he wants to change this with his slogan "best service in town".
Ultimately, Dong believes that to achieve longevity in a market, there has to be localization. From R&D, marketing to production, and even parts sourcing. It will allow them to offer relevant products to the market as well as establish good business relationship.
Dong’s economics background has given him the insight to establish facilities in key regions to maintain a good business environment; "a balance of trade has to be established in order to promote business expansion," he says.
To have a better impression and understanding of their vehicles, we visited one of BAIC’s factories in Beijing to experience how their cars are made and how they drive first hand. There we saw an advanced vehicle production line quite similar to what you’d see in a European or Japanese carmaker featuring machinery and parts from name brands like Bosch, Linde, Demag, Ogihara, Durr and robotics from Zurich-based ABB, among others.
We also got to personally experience the cars on the vehicle test track where they put each and every vehicle that comes off the line through according to BAIC representatives.
To further orient us with the different technological capabilities, we also visited their electric vehicle facility just outside Beijing. The facility currently produces three fully electric vehicle variants; the A115EV hatchback, A115EV sedan, and A520EV mid-size sedan. We also had a short test of the A115EV and A520EV within the complex.
BAIC in the Philippines
Chinese cars have truly come a long way since the first wave entered the Philippine market. BAIC officially entered the Philippines last year at the 5th Philippine International Motor Show through Universal Motors Corporation subsidiary Bayan Automotive Industries Corporation (BAIC) led by Commodore George Chua as its president and CEO.
The company will also follow their principal’s credo of being "faster, leaner, smarter". Using strong research and development capabilities to achieve top position in technology advancement, out-of-the-box business development and global resource integration.
Their current lineup consists of the MZ40 and MZ45 small vans, A113 and A115 in hatchback and sedan form, X424 4x4 and the midsize A523T.
Given its brief period of setup time Bayan Auto has opened temporary showrooms in Makati, Iloilo and Tacoloban to offer their products. Plans are ongoing for the expansion to more locations with full-service dealerships in key cities like Antipolo, Bacolod and Cebu. If sales do flourish for the newcomer from Beijing, future expansion plans include a possible assembly plant in Luzon for KD (knock-down) units.
Bayan Auto is also looking to roll out two new models this year, the A315 sedan and an SUV model to be named W620T.
BAIC has truly shown that the new Made in China car has certainly gone leaps and bounds. It won't be long before they go head on with the big boys.