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Suzuki balances its positions at two JVs in China

With the announcement of a new Chang’an-Suzuki plant to be completed by 2008, Suzuki Motor Corp. has apparently put an end to speculation that it would shift its future investments with its second partner in China, Changhe Automobile Co., Ltd.


Suzuki’s first joint venture in China was set up in 1993 with partner Chang’an Auto Group. Chang’an- Suzuki began making the Alto in 1995 and the Swift in 1999. In 1995, Suzuki set up its second joint venture with Changhe in Jingdezhen of Jiangxi Province.


When in 2001 Chang’an entered into a second car joint venture with Ford Motor Co., however, Suzuki’s interest in Chang’an seemed to be affected. That same year, Changhe-Suzuki not only introduced the Beidouxing (the WagonR in other markets) to the market but also approved an expansion plan to build the new Jiujiang plant in Jiangxi.


But in reality, Suzuki has been delicately balancing its positions with its two Chinese partners.


Although Chang’an-Suzuki started making the Alto minicar in 1995 and later introduced the Swift, for many years it did not add any new vehicle models. The new Swift (Yuyan) was released to the market only early last year.


If there had been any neglect of the Chang’an-Suzuki partnership, it is over now. “We will launch a completely new model to China every year as of 2006,” said company vice president Li Zhenqi. Recently, Chang’an Group vice president Huang Zhouqing was appointed as vice president of Chang’an-Suzuki.


At the time when the new Swift rolled off the production line last May, Chang’an-Suzuki also upgraded its Chongqing plant to an annual capacity of 200,000 units.


And the two partners also agreed to build a second plant in Nanjing, to be completed in 2008 with an annual capacity of 200,000 units.


Suzuki’s new assembly plant in Jiujiang of Jiangxi Province with partner Changhe was completed last March. Together with the new plant is an engine assembly line with a capacity of 150,000 units of the K14B engines. And the new Liana sedan rolled off the assembly line in November of last year.


The K14B engine is Suzuki’s first high-end engine to be produced out of Japan, according to Kunihisa Matsubara, chief representative of Suzuki Beijing Office. The Jiujiang plant has an annual capacity of 100,000 cars.


Suzuki’s capacity is expanding at both joint ventures in the hopes of serving customers in different regions in China. After the first Liana sedan, Changhe-Suzuki will introduce a hatchback model, a new sedan with a larger engine and economy cars with 1.0-1.4 liter engines.


To strengthen and coordinate its operations in China, the Japanese automaker has recently established the Suzuki (China) Investment Co., Ltd. in Beijing.

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