Reporter Tao Chunyu, an intern reporter, and Song Xiangbo reported that Changan Suzuki is accelerating its expansion in China by doubling its production capacity to 200,000 units in 2007. The company will invest an additional 800 million yuan into Changhe Suzuki to build a new production line capable of manufacturing 100,000 units annually. Plans are also underway for the construction of a second factory for Changan Suzuki, signaling a significant shift in Suzuki’s strategy in the Chinese market.
This move indicates that Suzuki Japan is intensifying its investment in China, with both Changan Suzuki and Changhe Suzuki embarking on aggressive expansion strategies. On October 26, Jiangxi Changhe Automobile Co., Ltd. (600372) announced its intention to increase capital by 800 million yuan to expand the production scale of Changhe Suzuki. Just days later, Changan Group’s chairman Yin Jiaxu reportedly discussed the idea of building a second plant for Changan Suzuki with senior executives, aiming to boost annual output to 400,000 units.
Industry analysts suggest that this competition could make Suzuki Japan the biggest winner. However, some question whether the focus of Suzuki’s strategic plan is shifting from Changan Suzuki to Changhe Suzuki. While Changan Suzuki has traditionally focused on car production, Changhe Suzuki has mainly produced small commercial vehicles. Now, with the introduction of sedan models at Changhe Suzuki, there are growing speculations about a possible realignment in Suzuki’s domestic operations.
Despite these developments, industry insiders note that Suzuki has not abandoned its partnership with Changan. In fact, prior to the capital increase at Changhe Suzuki, Suzuki had already invested 800 million yuan in Changan Suzuki to expand its capacity from 100,000 to 200,000 units. Additionally, Changan Suzuki plans to introduce new global models starting in 2005, which will be launched simultaneously in Japan, China, Europe, and India.
Changhe Suzuki, on the other hand, is preparing to launch the Suzuki Liana, a model that debuted at the Beijing International Auto Show, as part of its new production line. This project is expected to significantly boost the company’s performance and market presence.
The increasing investments from Suzuki in both joint ventures reflect a broader trend: the Japanese automaker is positioning itself to capture a larger share of the rapidly growing Chinese auto market. As Changan and Changhe continue their expansion efforts, the competition between the two partners is becoming more intense, with each striving to strengthen its relationship with Suzuki Japan.
In recent months, Changan Suzuki has also taken steps to improve its public image, including a high-profile recall of 157,000 Alto cars due to a potential tubing issue. This move is seen as a prelude to the launch of new models, such as the Swift, which is expected to be introduced next year.
Overall, Suzuki’s increased investment in China signals a long-term commitment to the region. With plans for new factories, expanded production lines, and a broader product lineup, the Japanese automaker is clearly looking to solidify its position in one of the world’s most competitive automotive markets.
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