Anhui plugs into electric cars to drive growth

Mr Wang Dongsheng, a senior executive at JAC, said the company's goal is to go global. JAC aims to make one million cars annually by 2020, out of which 30 per cent, or 300,000 units, will be new-energy vehicles.
Mr Wang Dongsheng, a senior executive at JAC, said the company's goal is to go global. JAC aims to make one million cars annually by 2020, out of which 30 per cent, or 300,000 units, will be new-energy vehicles.ST PHOTO: CHONG KOH PING
Mr Wang Dongsheng, a senior executive at JAC, said the company's goal is to go global. JAC aims to make one million cars annually by 2020, out of which 30 per cent, or 300,000 units, will be new-energy vehicles.
Mr Wang Dongsheng, a senior executive at JAC, said the company's goal is to go global. JAC aims to make one million cars annually by 2020, out of which 30 per cent, or 300,000 units, will be new-energy vehicles.ST PHOTO: CHONG KOH PING

Household appliance hub aims to be global leader in manufacturing new-energy vehicles

A province in China known mainly for making household appliances has its eyes set on electric cars.

And a local carmaker has high hopes that Chinese electric cars will become as well known globally as Chinese high-speed trains.

"Making new-energy vehicles fits in with the national strategy of moving into (green development). It fits in with global demands of conserving energy and fighting climate change," Mr Wang Dongfeng, a senior executive at Anhui Jianghuai Automobile Group (JAC Motors), told reporters recently.

Anhui, in eastern central China, is somewhat like the poorer and less famous cousin of prosperous neighbours Jiangsu and Zhejiang. Still, its lower cost and proximity to the affluent Yangtze river delta region has made it a magnet for factories set up by major Chinese electrical appliance brands such as Haier, Gree and Midea. So much so that Anhui, with a population of about 70 million, makes 25 per cent of all refrigerators, washing machines, air-conditioners and televisions in China.

But now, to move local manufacturing up the value chain, Anhui is keen to develop new-energy vehicles (NEVs), comprising electric cars and plug-in hybrids that combine a petrol engine with an electric motor and a rechargeable battery.

For 14 years in a row, Anhui has been the top exporter of Chinese cars, local officials told reporters during a visit organised by the Chinese Foreign Ministry last December.

According to a recent report by Anhui Daily, local carmakers Chery, JAC and Ankai sold 126,000 cars overseas in the first 11 months of last year, mostly to Iran, Europe and Latin America.

To give Anhui a boost to be a key NEV production base, Chinese Premier Li Keqiang proposed a "marriage" between JAC and German auto giant Volkswagen during a visit by German Chancellor Angela Merkel in 2015.

Under the deal, Volkswagen will invest €10 billion (S$16 billion) to jointly develop and make 40 new models of electric cars by 2025.

 
 

"Unlike other joint ventures, ours requires both sides to make equal technical contributions. We are not merely taking a product from Volkswagen to produce here," said Mr Wang.

"Our goal is to go global," he said, adding that typical joint ventures are aimed only at the Chinese market, with the foreign products made in China sold in China itself.

"We are now building an independent Chinese brand, comprising technology from JAC and Volkswagen, that will be sold worldwide."

A sports utility vehicle (SUV) priced at around 200,000 yuan (S$41,260) is slated to be released in the first quarter of this year, though the brand's name has not been decided, he said.

NEVs could be a bright spot for JAC. While its fuel-car sales fell 20.6 per cent to 510,892 units last year, it sold 28,263 NEVs, up 53.9 per cent.

By 2020, JAC aims to ramp up NEV sales by 10 times to 300,000 units, which make up 30 per cent of its sales target of one million vehicles.

While China has not specified a timeline for a ban on the sale of fuel cars, it has announced measures to get carmakers to switch to NEVs.

Under the cap-and-trade policy starting next year, carmakers that produce or import more than 30,000 cars must ensure at least 10 per cent of them are NEVs.This will rise to 12 per cent in 2020, and is expected to go up further in later years.

Besides manufacturing, Anhui is using technology to upgrade its agriculture sector.

In Hexian, a county that is a key vegetable distribution centre, a local firm has used technology such as temperature and light sensors to produce better-quality seedlings.

Anhui Xinyuan Agricultural Science and Technology company said it helped local farmers increase sales of their tomatoes, chillies and grafted melons by four million yuan in 2016, thanks in part to a bumper crop of chillies.

"Our seedlings, compared with those that the farmers grow, can increase crop yield by 20 per cent and the quality has improved," said company chairman Xia Xinfa.

"This has brought tangible benefits to our farmers," he added.

A version of this article appeared in the print edition of The Straits Times on January 22, 2018, with the headline 'Anhui plugs into electric cars to drive growth'. Print Edition | Subscribe