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On October 16, in the open space of Chengdu Longquanyi Economic Development Zone, Xu Ping, Chairman of Dongfeng Motor Corporation and Vice Chairman of the PSA Supervisory Board, and Tang Weishi, President of the French Peugeot Citroën Group (PSA) together scooped up the groundbreaking new ground for the fourth plant of Shenlong. Both sides are working together toward a more profitable high-end SUV model.
The fourth plant of Shenlong Company has a total planned investment of RMB 12.3 billion and a total designed production capacity of 360,000 units/year. It will be put into production at the end of 2016. The plant's production models will be based on high-end SUVs and MPVs, and plans for new energy products.
Through the Shenlong Chengdu plant, PSA can break through its current high-end difficulties through the currently hot SUV models in the Chinese market, driving Citroen and Peugeot brands upwards, and getting rid of the weak situation over the years of German-US Japanese brands.
At the same time, as the newly-built joint venture factories in China must have unwritten stipulations for the approval of their own brands and new energy, and Dongfeng Group has become the largest shareholder of PSA, PSA also agreed that the Chengdu plant will produce a small number of models for Dongfeng Fengshen. Dongfeng Fengshen will use the Shenlong's advanced technology and mature production lines, low-cost production of high-end SUV models. “According to the current development speed of Shenlong, there will be no obstacles to complete the 5A plan in 2015. The medium-term business plan for 2016-2020 will also be released at that time, including the planning of the fifth factory. It is also possible that the fifth factory will be located in Southeast Asia.†Qiu Xiandong, general manager of Shenlong, said.
High-end planning: a platform 5 cars
At the initial stage of the 4th factory of Shenlong 440,000 units and the maximum capacity of 360,000 vehicles, the Dongfeng Citroen brand has 120,000 vehicles in two models, Dongfeng Peugeot has 2 models of 110,000 vehicles, and the remaining 10,000 units are Dongfeng's own brand Fengshen. According to the official information previously released, Dongfeng Peugeot and Dongfeng Citroen each have an SUV and an MPV. Dongfeng's SUV is the Aeolus AX8 or AX9. Currently, Dongfeng Fengshen has produced its first product, the AX7, equipped with a PSA powertrain.
According to the global strategic alliance agreement signed between Dongfeng and PSA Peugeot Citroen on March 28 this year, both parties decided to increase the production and sales scale of Shenlong Co., Ltd. to 1,500 in 2020.
Since the beginning of last year, Shenlong has incorporated the fourth factory into its planning schedule. After more than one year of research and demonstration, the fourth plant of Shenlong Company was eventually selected at the Longquanyi District of Chengdu. At present, Chengdu Longquanyi Economic Development Zone has a number of car companies such as FAW-Volkswagen, Geely, Volvo, and Chuanqi Mustang.
Based on the strong growth trend, in July of this year, Shenlong has increased its annual target to “700,000 vehiclesâ€. In 2015, Shenlong will step forward with the “5-A†plan for the medium-term business and the “doubling of sales for three years†(doubling its sales volume on the basis of 2012).
The Dongfeng, which started late in the autonomy field, urgently needs a breakthrough in high-end vehicles, especially in the high-end SUV field. Li Chunrong once told reporters that one of the main reasons why Aeolus has performed poorly for many years was that it failed to come up with SUV models. The Great Wall relied on SUVs to become the most profitable car company, and Guangzhou Automobile's Chuanqi, which was later put into production one year after Aeolus, also relied on Class B SUVs last year. Achieve more than 100 million yuan profit.
All this has made the Dongfeng decision-makers eagerly aware of the fact that in the new SASAC evaluation, it is no longer just the use of corporate profits as an evaluation criterion. The operation of independent brands has also become an important reference standard. Therefore, the production of Dongfeng Fengshen SUVs at the high-end SUV production base in Shenlong is a low-cost shortcut for Fengshen. It is worth mentioning that Liu Weidong, deputy general manager of Dongfeng Motor Co., which is in charge of Shenlong, once served as general manager of Dongfeng Fengshen once.
In an interview with the Economic Observer reporter, Li Chunrong disclosed that the Fengshen SUV produced by the 4th factory of Shenlong is AX8 or AX9 (name of the second choice). Shenlong will sell it to Dongfeng Fengshen according to the production cost multiplied by a certain profit factor. Sales and after-sales service.
PSA's Asian Strategy: Bundle with Dongfeng
There is no doubt that the legal vehicle representatives of PSA and Renault have all been tied to Dongfeng's chariots, and achieving higher growth cannot be separated from the full support of Dongfeng. Dongfeng’s $800 million shareholding in PSA enabled the joint venture company Dragon Motors to usher in a new situation.
In the past two years, Dongfeng Peugeot and Dongfeng Citroën have grown rapidly under the E-Strategy, the 5A plan, and the three-year plan. The sales and sales of Dongfeng Peugeot and Dongfeng Citroen have exceeded 440,000 in 2012 and exceeded 550,000 in 2013.
At present, Shenlong’s existing three major vehicle production plants in Wuhan have a total installed capacity of 600,000 vehicles. This year, Shenlong’s production and sales target is “over 650,000 vehicles.†The three major plants are all operating at full capacity in two shifts, highlighting the bottleneck in production capacity.
Qiu Xiandong said in an interview with the Economic Observer reporter that at present, Dongfeng Peugeot and Dongfeng Citroen both lack high-end SUVs, only compact products, and high-end SUVs are also lacking in Dongfeng Fengshen, thus forming a platform for three brands in Chengdu. The situation of the car. Dongfeng Fengshen was able to “get hitchhiking†and produce Fengshen SUVs at the same time, which is also the result of Liu Weidong's active struggle.
It is understood that the EMP2 platform introduced by the Shenlong 4th plant is the most advanced modular platform for PSA. According to information given by Shenlong, the EMP2 platform of the PSA Peugeot Citroen has “more ductility, more dynamic power matching, and technical equipment. More perfect, more versatile parts, and other significant advantages. On the EMP2 platform, passenger cars and even commercial vehicle products of different grades, sizes and configurations can be derived; and they will be able to perfectly match the "E-Strategic Strategy" series of engines and series of new gearboxes and future new energy sources. Technology; At the same time, it can be perfectly adapted to current and future advanced technology and equipment.
According to Shenlong company sources, Shenlong is about to separate its production and sales, and set up a separate sales company to meet the needs of Dongfeng Group's listed companies' consolidated statements. Next, Dongfeng and PSA will jointly expand in Asia, especially in China and Southeast Asia, and even consider building the fifth plant in Southeast Asia.