Xu Heyi, Chairman of BAIC Holding Group, shared his insights on the future of the automotive industry, highlighting the impact of national economic stimulus policies. He noted that with large-scale infrastructure projects being launched across the country, the demand for commercial vehicles—particularly heavy trucks—is expected to outperform that of passenger cars in the coming year.
"In 2009, the production and sales of domestic automobiles will remain relatively stable," Xu said. While the growth rate of the automotive sector was lower in 2008 compared to previous years, he emphasized that the industry's fundamentals remain strong. "It might be unlikely to see GDP growth rates that are two or three times higher than before, but single-digit growth is still achievable."
He also pointed out that the decline in international oil and raw material prices has helped reduce production costs for automakers, which in turn could boost consumer demand. "The government’s rescue measures have had a clear positive impact on the auto industry, especially for commercial vehicles like heavy trucks." Optimistically, Xu believes that the growth rate in 2009 could match that of 2008. However, he added that market conditions will fluctuate, becoming more evident in the second and third quarters.
Looking ahead, the overall demand for the automotive market is expected to decrease, and industry efficiency may further decline. To counter this, Beijing Automotive Group plans to invest 1 billion yuan by the end of this year or early next year. This investment will focus on accelerating joint ventures, such as the collaboration between Foton and Mercedes-Benz, the Cummins engine project, and the development of its own brand of passenger vehicles.
Major construction projects are helping solidify the Beijing auto industry as a key pillar of the capital's economy. One of the most significant initiatives is the joint venture between Beiqi Foton and Daimler-Benz, which is set to become the largest and most technologically advanced commercial vehicle project in China. Additionally, the cooperation between Beiqi Foton and U.S.-based Cummins Engine is progressing well, with production expected to begin in April or May next year. "This project will be a major highlight for BAIC," Xu said, underscoring its importance to the company’s long-term strategy.
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