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?????????

• ?????????????
• ???????????
• Cooperation and Innovative Development
• ---FJMGs step forward from Fujian-Taiwan
  cooperation to international cooperation

?????????????? ??? Ling Yuzhang, Chairman of
Fujian Motor Industry Group Co 2006?6?26?
??? June 26, 2006 Beijing
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• ????,??????????????
• I. The establishment of joint ventures marked an
  epoch in Chinese motor industry
• ?????????????
• II. Unique mode of cooperation between Fujian and
  Taiwan
• ?????????????????
• III. From Fujian-Taiwan cooperation to
  international cooperation
• ??????-??????????
• IV. Independent innovation---the third piece of
  bread in the development of Fujians motor
  industry
• ??????
• V. Expectation

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• ??????????????
• ?????????????????????????????,???????????????
  ????-?????????????????????????
• Ladies and Gentlemen
• I wish to thank the organizer of this
  international conference for giving FJMG this
  opportunity to exchange ideas. The topic of my
  speech today is Cooperation and Innovative
  Development---FJMGs step forward from
  Fujian-Taiwan cooperation to international
  cooperation.

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????,?????????????? I. The establishment of
joint ventures marked an epoch in Chinas motor
industry

• ?????????,???????????,????????????
• With the Reform and Opening-up of China,
  Chinas motor industry has ended the history of
  self-seclusion and achieved unprecedented
  progress and prosperity.
• ???????? ??????,????????????5000?(1978??2600?
  ,1980?5418?),????????????????2005?????????576??,?
  ???????,??????????,???????279???
• ? Big-range increase in production and sales At
  the early stage of Chinas Reform and Opening-up,
  annual sales of cars around the country were
  merely 5,000 units (about 2,600 units in the year
  1978 and 5,418 units in 1980), less than the
  daily output of a single multinational automobile
  company whereas by the year 2005 the annual
  automobile sales in China had reached 5.76
  million units (next only to the USA and Japan),
  among which 2.79 million units were passenger
  cars. Automobiles have been owned by tens of
  thousands of households.

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• ??????????????????,?????????????????????????
• ? Tangible benefits to the Chinese people The
  Chinese people started to enjoy the speed and
  facility brought about by automobiles after half
  a centurys development of motor industry in
  China.
• ??????????????????????????????,???20???????,??
  ????????????????????????????????????,?????????????
  ?????????,1994???????????????????????????,????????
  ??
• ? Contributions to industrial progress In the
  joint-venture epoch of Chinas motor industry the
  maturity of the industry was accelerated, which
  has brought about a great leap-forward over the
  past 20 years, and made preparations for the next
  epoch of independent innovation. From an
  objective point of view, joint venture/cooperation
  has been an inevitable choice in the development
  of Chinas motor industry. The Automotive
  Industry Policy (AIP) issued in 1994 made an
  historic contribution in guiding and promoting
  the development of Chinas motor industry.

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• ????????? ?????????????,???????????????????????
  ????????????????????,????????,??????????????????,?
  ???????????????
• ?Innovation and development is yet to go on With
  the further development of the joint venture, a
  series of problems---e.g. the independence of
  development, the localization of RD, the
  internationalization of sales and the
  professionalization of managers ---occurred and
  needed to be solved, otherwise they might impact
  the continuous advancement of the core competence
  of the JV and the sustained and healthy
  development of motor industry.

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????????????? II. Unique
mode of cooperation between Fujian and Taiwan

• ?????????????????????????1958?5?8?,???????????
  ???,????????,?????????????????,?????????????????
  ???,?????,??????????1993?1994?,?????????????????
  ??
• ?Fujian motor industry in its early days The
  vehicle manufacturing in Fujian dates back to May
  8, 1958, when the first vehicle East Red went
  off the line. But the average annual output of
  vehicles in Fujian had remained 2,000 to 3.000
  units until early 1990s and motor manufacturers
  were scattered and small-scaled, with low
  efficiency and in disorder, and short of
  expansion fund, turning out low-end products.
  During 19931994 Fujians motor industry faced
  the life-and-death challenge.

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• ?????????????????,??????????????????????????
  ???,????,????,???????,??????????,?????????????????
  ??,???????????????????????????,???????????????
  ????
• ? Fujian-Taiwan Motor Cooperation It was not
  until over ten years ago, at the end of the 8th
  Five-Year Plan period of China, that the new
  management of FJMG made a review of history and
  learned from past experiences. They based
  themselves on the situation of Fujian, provided
  conditions for cooperation with Taiwan and
  grasped the historic opportunity for development.
  They established a unique mode of
  development---the SEM mode, with the feature of
  making overall planning and implement in phases
  to ensure sustainable and steady development.
  And Fujians motor industry has experienced the
  fastest growth in history over the past ten
  years.

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• ?????????????????10??,??????????????2460????9
  3252?,????????2.3?????111.1??,??????620?????7.1??,
  ???????????????
• ???,????????????????????,??????????????
  ,???????????????????????????????????,???????????,?
  ???????????????????
• ? The fruits of Fujian-Taiwan motor cooperation
  The past ten years witnessed a great success in
  Fujian-Taiwan motor cooperation. FJMGs annual
  sales of vehicles (including refitted vehicles)
  increased from 2,460 units to 93,252 units,
  annual sales revenues from 230 million (28.75
  million) to 11.11 billion (1.39 billion), and
  annual tax payment from 6.2 million (775,000)
  to 710 million (88.75 million).
• Through Fujian-Taiwan cooperation over the
  past ten years people in Fujian have realized
  their dream of motor production and sedan
  production one after another. Now FJMG has the
  qualification to produce all types of vehicles
  covered by the national automobile industry
  policy. What is more important, the successful
  Fujian-Taiwan cooperation serves as a platform
  for further cooperation with international motor
  giants.

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????????????????? III. From
Fujian-Taiwan cooperation to international
cooperation

• ???????????????????????????????,??????????????
  ???????,??????,????????????????,?????????,????????
  ,???????????????,??????????????
• ? International cooperation is necessary to
  development Fujian-Taiwan cooperation has sped
  up the development of Fujians motor industry and
  laid a solid foundation for its further
  expansion. In the meantime, however, we
  recognized that there was still a gap between
  Taiwans motor industry and the advanced
  international counterparts. So we made the
  strategy in the very beginning to build the
  platform of Fujian-Taiwan cooperation initially
  and to extend it for future international
  cooperation.

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• ?????????????????????????????????????,????????
  ???????????????,??????????????????,???????????????
  ?????????????????????,???????????,??????,?????????
  ??????
• ?????????????????????,?????????????????
  ????
• ? International cooperation---a reasonable choice
  for the two partners across the Taiwan Straits
  Compared with domestic advanced motor
  manufacturers, we still lag behind in financial
  power, technology, management, human resources
  and overall strength. Based on our local
  situation we chose to start from Fujian-Taiwan
  cooperation to move towards international
  cooperation, utilizing international capital and
  technology, integrating quality resources, in
  order to make Fujian motor industry bigger and
  stronger. On this path of development, there are
  many steps to be taken---technology introduction,
  adaptation and innovation.
• We will fully utilize the platform of
  international cooperation and make efforts to
  achieve the localization of international brands
  and create characteristic self-owned brands.

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• ???????????????
  FJMGs international cooperation projects
• ????????????????????20800???,?????????16000???
  ,???20???????,????????-??NCV2?NCV3????,??????4????
  ?
• ? Cooperation with DaimlerChrysler AG (DCAG) of
  Germany The project with a total investment of
  208 million and registered capital of 160
  million will produce below 20-seater vans.
  Initially introduced will be Mercedes Benz vans
  of NCV2 and NCV3 series. The annual capacity for
  phase I will be 40,000 units.
• ????????????????????????????????????RG???????
  ????????
• ? Cooperation with Chrysler Group of USA Planned
  to be introduced are serial products of Chrysler
  Group. The cooperation project of Chrysler RG has
  already kicked off at SEM.

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• ?????????????2006?4?12????????????????????????
  ???????????????,?????????,????????????????,???????
  ???????????MPV??????????? 5?29?????????????,9?????
  ???????,?????????????????
• ? Cooperation with Mitsubishi Motor Corp (MMC) of
  Japan On April 12, 2006 FJMG, MMC and China
  Motor Corp (CMC) from Taiwan jointly held the
  signing ceremony for MMCs participation in SEM.
  Through its participation in SEM, MMC will give
  full support to SEMs development and help build
  up SEM into the production and sales base for
  Mitsubishi cars, MPVs and light commercial
  vehicles in China. On May 29 this year,
  Mitsubishi Lancer and Space Wagon were
  launched in Shanghai and new MMC vehicles are
  yet to come in September. In the future new
  vehicles will be launched by SEM every year.

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??????----?????????? ?.Independent
Innovation---the third piece of bread in the
development of Fujians motor industry
?????????????????????????????,??????????,?????
??????,???????????????? ???????????????,????????
?????,??????????????,???????????????????,?????????
?????????????????? ????????,??????????????????
????,??????????????,????????,????????,????????????
,????????? The story of eating bread deserves
our consideration. A man, after eating two pieces
of bread, was still hungry. Only after eating the
third piece did he become full. Therefore, he
thought the first two pieces were unnecessary.
SEM, a Fujian-Taiwan joint venture, is still not
strong enough. Fujians motor industry still has
a long way to go. It still needs the third piece
of bread. However, it is obvious that without the
cooperation between Fujian and Taiwan,Fujians
motor industry would not have achieved todays
status. Without the cooperation with
international motor industry, it is also hard to
imagine the further development of Fujian motor
industry. At the turning point of the third
piece of bread, FJMG will apply itself to narrow
the technological gap between multinational
companies and itself. On the basis of
Fujian-Taiwan cooperation and international
cooperation, we will deepen our commitment to
reform and promote independent innovation in
order to improve our core competence and achieve
development based on local conditions.
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• ?????????????????????????????,????7527??????
  ?????????,???????????????????????,??????????????
• ? RD innovation---to strengthen the
  construction of RD Center We have accelerated
  the construction of SEMs RD center. The RD
  center has been finished with the initial
  investment of 75.27 million (9.4 million). The
  three buildings--- for vehicle testing, RD and
  physical-chemical experiment respectively, have
  been put into use, and the investment will be
  increased year by year.
• ?????????????????????????????????????????????
  ???,????????????,???????????????,?????????,???????
  ???
• ? The innovation in the mode of cooperation
  Fujian-Taiwan cooperation, international
  cooperation and the transformation of state-owned
  company into stock company going along in
  parallel On the basis of Fujian-Taiwan
  cooperation, FJMG started international
  cooperation. In the meantime, it promoted the
  reform of property right system and conducted the
  transformation of its subordinate state-owned
  companies into stock companies to realize
  multi-investor situation and harmonious
  development.

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• ?????????????????????????,??????????????,?????
  ???????????,??????????????????????????????????????
  ??????????????,???????????????????,?????
• ? Brand development innovation---multi-brand
  strategy
• With the launch of Lancer, which bears
  Mitsubishi trademark, SEM will carry out the
  dual-brand strategy, forming a Mitsubishi brand
  system and a Soueast brand system. The Mitsubishi
  brand will be used for the introduction and
  adaptation of the latest Mitsubishi products.
  While the Soueast brand will be used for the
  independent development of new products to meet
  the market demand by utilizing the company
  resources and social resources. These two brands
  are expected to supplement each other in their
  mutual development.
• ???????????????????,????????????????,?????
  ???????????????????
• With the cooperation with DCAG and Chrysler
  Group and the transformation of state-owned
  companies into stock companies, we will further
  develop new international brands and self-owned
  brands.

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• ??????
• ??????????????,?????????,?????,?????,??????
• ???????????,????,?????
• ???????????,????,?????
• ???????????,????,?????
• V. Expectation
• After a few years of development FJMG will
  become multi-systems, multi-brand, with series of
  products and access to internationalized market.
• ? through joint venture and cooperation, to
  absorb the advantages from all parties and
  improve its own quality and strength
• ? through introduction and innovation, to base
  on local resources, combine forces and make
  innovation
• ? through independent innovation, to take
  previous experience for reference, develop
  features and achieve independent innovation.

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??!Thank you!