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Brilliance Auto under supply pressure of hot-selling Junjie car PDF Print E-mail
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Wednesday, 11 October 2006
BEIJING, October 11 (InfoChina) – Upon current undersupply of the Junjie car, Brilliance China Automotive Holdings Limited (NYSE: CBA) noted that the shortage cannot be eased in a short term due to insufficient production capacity.

Qi Yumin, board chairman of Brilliance Auto, was quoted by China Business Post as saying that the supply shortage is caused by large quantity of orders and undersupply of parts. Besides, the company now attaches more importance on improving the quality of the car than expanding capacity in a hurry.

The Junjie car, priced at 85,800 to 128,800 yuan, has received warm welcome in China’s domestic car market since it was launched in March this year. So far the total order for the car the company received has amounted to near 40,000 units. In contrast, the production capacity of the company now only stands at some 10,000 units a year.

As for the hearsay by some media that Brilliance Auto (NYSE: CBA) plans to co-produce the Junjie car in southwest China next year with Chinese liquor giant Wuliangye Distillery Group Co to ease the current supply shortage, Qi denied that saying and noted that the two company’s cooperation project in southwestern Sichuan province will focus on the production of Jinbei light passenger car and SUV, which are supposed more suitable to be produced in southwestern China for cost consideration.

Therefore, so far there is still no signal for Brilliance Auto to produce the Junjie car in other places other than the original production base in Shenyang, and no large-scale expansion plan has been schemed by the company. But Qi disclosed that the company will start a sedan production line upgrading project soon and accelerate the production speed by improving the technological process.

Qi also disclosed that Brilliance Auto so far still made no profits in the automobile business. Insiders believe that low price, huge investment cost and relatively insufficient sales are the major reasons for the company’s losses.
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