Auto companies forge ahead in launch of affordable cars in China

General Motors along with their local partners in the Chinese auto markets are on the brink of launching low cost, affordable cars for the local…

General Motors along with their local partners in the Chinese auto markets are on the brink of launching low cost, affordable cars for the local markets. With this aim in mind, GM has formally opened a new plant for production of their Baojun brand. The new production unit is situated in south of the Chinese city of Liuzhou and is the second plant from where the Baojun brand of cars will be produced which comes in at a starting price of $6,400 or ¥40,000.

The new GM plant in Liuzhou will have capacity to produce 400,000 cars per annum. GM has invested ¥8 billion in first phase of construction of the plant from where Baojun 630 compact sedan is being produced at a base price of ¥62,800. The plant will also produce the mini car Le Chi once fully operational.

China’s new middle class of customers are seen entering the auto markets with greater demand for cheaper and more affordable cars which is putting pressure on low end car manufactures such as Geely and Chery. It is estimated that in the coming year, 65.6 million households will have annual incomes of ¥60,000 or more and this will enable them to invest in a no frills car. This has prompted auto companies to sit up and take note of this face and Nissan Motor Company has already launched two of their five Venucia models. Nissan aims to sell over 300,000 Venucia vehicles per year by 2015.