Wuling vans - Built in Liuzhou China

Here is an interesting article that was in the Detroit Free Press yesterday.
It's about the Wuling minivans that are built here in Liuzhou China.
This joint venture between GM, Shanghai Automotive and Wuling motors is where I'm working.
I'm working in the new engine factory mentioned in the article.

This article shows clearly the auto situation in China.
1% of chinese people own a car.
4/5 car buyers buying their first car.
car costs $3500 but that is 1-1/2 year's salary.
As the pro and anti-UAW guys debate in the comments at the bottom, 1-1/2 year's salary for a UAW might be $75K to $150K.
Says something about why the US auto industry is struggling.
It's definitely an education and an adventure being here.
There are probably other articles in other newspapers like this.
If you see some interesting ones, send them my way.



I'm copying this article into my blog because if I put a link here it may disappear after a while.


Link to Freepress:


http://www.freep.com/apps/pbcs.dll/article?AID=2007704190420

Article text:


Why this funky cheap ride is worth a fortune to GM
April 19, 2007
BY KATIE MERX
FREE PRESS BUSINESS WRITER
LIUZHOU, China -- Yes, the Wuling Sunshine is bigger than a breadbox.
General Motors Corp. and its Chinese joint venture partners count on big sales of relatively tiny vehicles -- especially the mini-minivans dubbed breadboxes -- assembled in southern China to further spur the Wuling brand's growth and profits in the world's fastest-growing vehicle market.


In Liuzhou, an industrial city of 1.6 million more than 1,200 miles southwest of Shanghai near the Vietnam border, GM, together with its partners Shanghai Automotive and Liuzhou Wuling Motor Co., builds spartan minivans and pickups sold under the Wuling badge. Elsewhere in China, Wuling manufactures the Chevy Spark.
The most popular Wuling vehicles are the mini minivans -- the Sunshine, the New Sunshine and the recently launched, so-called luxury Wuling Hongtu -- it builds in Liuzhou. Categorized as mini commercial vehicles, or small work trucks, their prices start at $3,500 and they get better than 40 miles to the gallon in the city.
A high-end Hongtu with a 1.5-liter engine can sell for as much as $6,800 with all the bells and whistles, including an optional air bag.
"We think we are providing to the customer a transportation tool that is low-cost, multipurpose -- and they are pretty good quality and can be used under tough conditions," said James Hu, director of mini commercial vehicle marketing at Wuling.
The Chinese call the vans breadboxes, because of their simple box-like appearance.
The vans are incredibly popular. Last year, the Wuling brand sold 420,140 vehicles to capture 37.3% of the mini commercial vehicle market, up from the 30.6% of the market it held in 2005 when it sold 310,288 mini commercial vehicles.
Its next-closest competitor, domestic automaker Chang An, holds about 15% of the market, Hu said.
In fact, the mid-level Wuling minivan -- the Sunshine -- was the best-selling vehicle in all of China last year, with sales of 292,400, Hu said.
In the first three months of this year, Wuling's market share in the mini commercial segment rose to 46.6 million.
Hu and Shanghai GM Wuling Vice President and CFO Thomas Drumgoole declined to comment on full-year expectations. But others at the automaker have speculated that the mini vehicle maker will sell about 500,000 vehicles this year. Drumgoole said his objective for 2010 is to hold more than 35% of the segment.
Tim Dunne, director of Asia-Pacific Market Intelligence for J.D. Power and Associates, said the Wuling vehicles are very popular in the countryside.
"They're utilitarian," Dunne said. "You can move six to eight people around with them. You can use them as work vehicles. They're cheap to buy and cheap to repair."
And in a market where the vast majority of buyers will pay cash and use the vehicles for hauling goods or business associates during the week and for carrying family -- parents, in-laws and children -- on the weekend, those are all attractive attributes, GM executives and analysts agree.
Hu said the average age of Wuling buyers is under 40 with a high school education. Four out of five are first-time car buyers. And their average monthly income is under 1,500 yuan -- about $200 -- meaning the cheapest Wuling model costs a year and a half of income.
Because personal vehicle ownership in this vast, nominally communist nation is basically only 7 years old -- and based primarily in the more properous coastal regions -- 80% of vehicle sales across the board have been to first-time buyers.
It's quite a contrast to the United States, where most adults own vehicles. In China, less than 1% of the population owns vehicles.
So Wuling focuses on growing sales in rural villages and small towns of China, where it sees massive opportunities for growth in the sales of its tiny vehicles. On China's scale, Wuling defines villages as locations with populations of 5,000 to 10,000. It defines as a small town any city with a population of 200,000 to 500,000.
The model for Wuling is "low-cost and high-value production," Wuling President Shen Yang said Wednesday through a translator.
GM executives say that, while it is credited with bringing engineering expertise to the partnership, Wuling has taught GM how to balance the use of automation with human labor to protect the slim margins typical of small cars.
While adding little automation over the last four years, Shen said, Wuling has reduced the number of labor hours it takes to build a vehicle by 37% and cut its costs per vehicle by nearly 60%.
Most of the assembly of Wuling vehicles is not automated, to keep costs down.
Shanghai GM Wuling executives said the total cost of labor including benefits is less than $4 per hour per person in Liuzhou, where the company employs about 10,000 workers.
Five hundred of those workers are at the new Liuzhou engine plant, which plans to launch production in August building up to 250,000 engines for the mini vehicles. Said GM China President Kevin Wale: "Our aim is to stay ahead in this critical market for General Motors by offering local consumers the products and services that they want, when they want them."
And Wuling sees itself filling a big role on the modest end of consumer desires.
Said Shen, through his interpreter: "We have words in our vision to be the best small and mini vehicle maker in the Chinese market."





End of article





I was particularly amused by these comments to the article:

cranial


Lets bring them over and sell them at Sams club. They would be a big hit here. Just think, a car you could buy new every year if you wanted to. If GM could only build the rest of the cars they sell here over there, everyone could afford a new car. And we could take our hard earned money to a real bank instead of the uaw job bank. Posted: Thu Apr 19, 2007 1:31 pm

dadcss


A few lines from the article that stood out to me. …the cheapest Wuling model costs a year and a half of income. …their prices start at $3,500… …Wuling has taught GM how to… If Wuling has taught GM anything it’s how to sell an ugly vehicle to the masses for 1.5 years wages. I put that at $150K in UAW wages. Let’s hold our breath and see how many are still on the road at 50K miles.

chuckram


dadcss; Where the hell are you living?? A year and a half salary for a UAW worker is about right IF, you are a die maker, electrician, or tool maker. A flunky on the assembly line does not make anywhere near that much money in such a short amount of time. I worked at Chrysler for 37 years and the most I made working on the line was $48,000. Even if you accepted every minute of over time, you would have a hard time coming out with 150,000 in a year and a half. I mean, get serious will you. You anti union people sound just like the anti gun people. Mostly BULL SH*T. And you all try to make it sound so true and official. I think you should join the Brady group and see if you can either help them do away with all our gun rights or maybe you can convince them the UAW has something to do with the number of guns out in the general public. Then the whole bunch of you can do a lot more damage to the unions in this country. Then again, maybe you should just STFU. You don't know what your talking about anyway. Pea brained idiot.



Hope you all enjoyed this as much as I did. :)