Industry Trend Analysis - Autos Investment Round-Up: China Solidifying Its EV Hub Status - OCT 2017


BMI View: EV related investments will continue to dominate the investment landscape in China and Thailand will emerg e as a hot spot for CV related investments as automakers look to capitalise on its infrastructure investment plan.

ASIA AUTOS PRODUCTION INVESTMENT
Date Announced Country City/State/ Region Company Value Brief Description Date Onstream
na = not available. Source: BMI
Apr-17 China Hunan Province Mitsubishi Motors na GAC Mitsubishi Motors, a joint venture with Guangzhou Automobile Group, will build a plant in China, with construction expected to start by the end of 2017 and engines expected to start being produced by December 2018. The plant is expected to have an initial capacity of 150,000 units annually. 2018
Apr-17 Malaysia Kedah Go Auto Group USD455mn The new factory will produce Great Wall Motors SUVs and energy-efficient vehicles for South East Asia, with an initial capacity of 24,000 SUVs and a total capacity of 50,000 units. The final phase will involve upgrading its production facilities, including adding more local component and engine production and testing facilities. 2020
Apr-17 China Wuqing Hella na A joint venture between Hella and Beijing Hainachuan Automotive Parts (BHAP), a subsidiary of the BAIC Group, will start production in October 2017 with a capacity of 1.2mn headlamps per year while employing about 250 people. 2017
Apr-17 India Andhra Pradesh KIA Motors USD1.1bn Kia announced that it has concluded a memorandum of understanding to establish an assembly plant in India. It expects to have an initial production capacity of 300,000 units per year by 2019. 2019
May-17 India Ranjangoa Fiat na Fiat India Automobile has signed an agreement to supply 220,000 diesel engines to Tata Motors over a three year period, which will likely lead to an expansion of Fiat's production capacity as it is expected to run out of production capacity in 2018. 2018
May-17 China Canton GAC USD679mn GAC will expand an existing facility to accommodate the production of 200,000 units, specialising in electric and intelligent vehicles. 2018
May-17 India Gujarat Suzuki USD876mn Suzuki will invest additional funds in its Gujarat industrial site in India to install a third assembly line by 2020. This will boost Suzuki's total capacity to 2.25mn units per year, or 60% of its global capacity. 2020
May-17 Thailand Bangkok Tata Motors na Tata Motors said it has set aside USD14.5mn to tool up Bangchan's assembly plant, which is set to have a production capacity of 8,000 Xenon pick-up trucks and 2,500 mini trucks per year. na
May-17 China Hangzhou Geely EUR830mn (USD980mn) Geely announced that it will invest EUR830mn to build a new research and development facility that will consist of the Institute of Vehicle Centre Architecture Research, the Institute of Automotive Powertrain, the Institute of New Energy Automobile Research and an automobile design centre. na
May-17 China Chongqing Dana Incorporated USD13mn Dana will build a new 7,500 square meter (80,000 square foot) manufacturing facility 2018
May-17 China Shenzhen BYD And Daimler EUR130.4mn (USD154mn) BYD and Daimler will each invest EUR65.2mn to bail out Denza, their Chinese joint venture in electric vehicles, that has suffered losses since 2014 and requires a capital injection to remain operational. 2017
May-17 China Chongqing Hyundai na Hyundai is planning on investing in two new production plants in China, each with the capacity to make 300,000 units a year. Hyundai also plans to boost the number of dealers in China from 1,000 to 1,400 by 2020. 2020
May-17 Japan Fukushima DENSO USD135mn DENSO announced that it will build an additional plant at its Fukushima location in Japan to include power train components by 2023. 2023
May-17 Thailand Rayong Harley-Davidson na Harley-Davidson will invest in a new production plant in Thailand to capitalise on the growing Asian demand for its motorcycles and avoid the high import tariffs for larger engine sizes. na
May-17 Thailand Mueang Chonburi FOMM USD6mn FOMM will invest in a new production facility to produce its four-seater electric vehicle and will have an annual installed capacity of 5,000 units per year. na
May-17 China na GM na General Motors announced that it will construct a battery factory in China this year. na
May-17 Thailand Chonburi AkzoNobel EUR31mn (USD36.6mn) AkzoNobel has opened a new performance coatings production facility that currently employs about 100 people. The facility is expected to grow to 200 employees. 2017
May-17 China Wuhan Dongfeng EUR145mn (USD171mn) Dongfeng Electric Vehicle will establish a joint venture in the field of electric and hybrid rechargeable vehicles in partnership with Shenzhen Hangsheng New Energy. na
Jun-17 China Shenzhen Groupe PSA EUR500mn (USD590.5mn) PSA will enter into a joint investment of EUR500mn in 2017, shared equally between PSA and Changan, to increase its production at the underutilised DS plant. The plant will have a capacity of 200,000 units a year. 2018
Jun-17 China Shanxi Geely EUR3.9bn (USD4.6bn) Geely will build a factory and logistics base with the aim of reaching a production capacity of 200,000 units annually. The logistics base will be used to distribute its products more easily throughout Central Asia, Russia and Eastern Europe. na
Jun-17 Thailand Chonburi Fuso na The facility will have an annual production capacity of 3,000 units. Daimler Commercial Vehicles, a new wholly owned subsidiary, will make and sell the trucks under the Fuso brand. 2018
Jun-17 China Hebe Daimler And BAIC EUR655mn (USD773mn) Daimler and BAIC Motor are preparing to locally produce battery electric vehicles by 2020 under their joint venture, Beijing Benz Automotive (BBAC). 2020
Jun-17 China na SAIC And GM EUR3.4bn (USD4bn) SAIC-GM plans to invest in the development of a new generation of electric and hybrid vehicles over the next seven years. The joint venture announced that it would offer electric vehicles, hybrids, plug-in hybrids and traditional vehicles with standby systems. na

In BMI's investment round-up of countries in the Asia region, we have identified 23 new investment projects that were either announced or inaugurated in Q217. Available investment values for these projects represent a total of USD14.57bn, which is a 294.5% y-o-y increase compared to Q216 ( see ' Autos Investment Round-Up: Growing Demand And Favourable Policy Boosting Investment ' , July 19 2016).

China Solidifying Its EV Hub Status

The most profound aspect of the investment round-up is the significant investment in electric vehicles (EVs) in China specifically, with six of the investments being related to EVs. These EV related investments total over USD5.5bn and range from battery specific production to research and development (R&D) and complete EV manufacturing. China is solidifying its position as an EV manufacturing hub by subsidising and promoting EVs as part of its increasing efforts to cut its carbon footprint.

This quarter's investments also highlight the theme of new market entrants using the revolutionary technology of EVs as a way of challenging established automakers ( see 'EV Start-Ups vs Established Automakers - Who Will Dominate?', May 16). This theme is playing out as more established automakers divert focus towards EVs with General Motors Company and Daimler investing significantly in China's growing EV sector.

Geely's Big Push

Geely has emerged as one of the most active investors, announcing USD4bn worth of investments in Q217, with a special focus on establishing a well developed distribution network along with significant investment in R&D to develop EVs and self-driving vehicles ( see ' Proton's Production Base A Launch pad For Geely In ASEAN ', May 26). Furthermore, Geely will use its planned investment in a Chinese logistics base, coupled with its access to Volvo's engine technology, to tap into Central Asian, Russian and Eastern European markets.

CV Producers Taking Aim At Thailand

Another trend emerging in Q217 is the increased commercial vehicle (CV) investment in Thailand , particularly from Fuso and Tata Motor that will set up CV production facilities with a combined annual capacity of over 5,500 units ( see ' Japanese Dominance A Challenge For Thai-Made Fuso Trucks ' , June 12) . We believe that these investments are the automakers' attempt to capitalise on the government's long-term infrastructure development plans that will focus on upgrading Thailand's logistics infrastructure ( see ' Residential, Commercial Building Investment To Remain Strong ' , July 27).