Zhongxing Breaks Ground on SUV Plant in Yichang, Eyeing Sedan Market

Hebei Zhongxing Automobile Co Ltd (ZXAuto), known mainly for its pick-up trucks, starts construction work for its first passenger-car manufacturing base on Nov. 29. Located in Yichang, Hubei, a city on the Yangtze River, the new plant is designed to roll out up to 200,000 SUVs a year when fully completed in 2014. Investment will reach 3 billion yuan.

Established in 1999, Zhongxing has been a major pick-up producer and exporter in China ("GrandTiger" is its most popular product), and started to build Landmark SUVs in 2008. Last year, it sold 38,500 vehicles (including 12,000 in overseas markets), posting revenues of 1.8 billion yuan.

Zhongxing’s SUV production line will be relocated to Yichang from its current site in Baoding, Hebei, where the company is based. The Baoding plant will be devoted to vehicles of body-on-frame construction (mainly pick-up trucks, which are classified as commercial vehicles in China); the Yichang one will produce passenger cars of monocoque, or single-shell, design.

While the Yichang base is officially labeled as a SUV project, Zhongxing hardly conceals its intention to turn it eventually into a sedan factory. On its website, the company already talks about launching CUV, coupe, and sedan models based on the "C platform" within five years.

Several other SUV and pickup makers, including Zhongxing’s crosstown rival Great Wall Motors, have successfully gained a foothold in the sedan market, which is several times the size of the SUV one in China. Yet Zhongxing is still waiting for government permission required for building those three-boxed people-movers. Like many Chinese, it seems to believe that if you build the factory, the permit will come.