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To forge the world first class auto maker has always been mentioned by Xu Liuping, Chairman of Changan Auto, and their cooperation with PSA as well as constructing many world research centers in many countries revealed their ambition to be an international giant auto manufacturer.
Changan Auto signed contract to build joint-venture with PSA in Paris on July 9, 2010. And the agreement rules that PSA and Changan Auto will produce and sell series of light commercial vehicles, passenger cars and new energy vehicles. In the preliminary stage, PSA DS series products will be introduced and the joint venture indigenous brand vehicles will be established. The first vehicle will be produced till 2012. And the joint venture will be located in Shenzhen with first phase investment 8.4 billion RMB (USD) and 200,000 production capacity.
In adidition, Changan Auto made great improvement on R&D.
Changan Auto Britain R&D center set up in Nottingham Science Park late June, and this is the third Changan Auto overseas R&D center after setting in Turin and Yokohama. And Changan Beijing, Jiangxi and Harbin R&D institutes were established this April.
1,405,000 Changan vehicles were sold last year, up 63% over last year, listed top four China auto makers. And their sales were 60,000 units more than FAW, listing the second. Their operation revenues were 25,204,000,000 Yuan (3,718,536,000 USD) with profiting 1,078,000,000 Yuan (159,044,000 USD) and the figure for GAC Group were 50,254,000,000 Yuan (7,414,295,000 USD) and profiting 3,256,000,000 Yuan (480,366,000 USD), but the sales were just half of Changan Auto.
Mr. Xu concludes that deletion of medium and high-end vehicles and narrow profits will confine development of Changan Auto.
In this way we can see why Changan Auto signed contract with PSA just nearly half year after merging Hafei Automobile.
According to some sources, the cooperation may be similar to SGMW. As we all know, Wuling Auto is Changan main rival, and Wuling surges after getting supports from GM engine technology. And Changan Auto also wants to make great improvement by international auto giants. Changan Auto may also develop high-end car markets by cooperating with PSA, and it is possible that the joint venture may produce medium and high-end commercial vehicles in two years.