Zunchi sedans rolling off production line.	Assembly workshop.	Robot welders.

The year 2006 marked a watershed in China’s auto industry - courtesy of Brilliance Autos, star of Northeast China’s industrial base.

It was in 2006 that Splendor, the new high quality engine from the Brilliance workshop, immediately won the hearts of China’s auto enthusiasts upon its public unveiling. The Splendor model is China’s first turbo-charged 1.8-litre gasoline engine. Brilliance stands out among other Chinese auto manufacturers for its production of cars whose engines, as well as exteriors, are domestically manufactured. It was also in 2006 that 3,000 of the Brilliance Zhonghua models were exported to Germany, and that Brilliance Jinbei Automobiles Co. Ltd was named one of the National Key Enterprises of Auto Exporting.

Brilliance sales in the first three quarters of 2006 hit 151,200, putting it at a number nine ranking among China’s automakers. Brilliance also generated RMB 1.5 billion on the Hong Kong stock market.

Government Support
The hopes of Liaoning province, originally China’s main center of heavy industry, as well as its 350,000 employees were pinned on Brilliance. The company owes much of its success to government resources and information.The vice provincial governor of Liaoning responsible for economy headed a delegation to the Brilliance offices in May 2005. After thorough research and investigation, the team initiated a series of measures to remedy difficulties that Brilliance had been experiencing. Qi Yumin, former deputy mayor of Dalian and also an experienced manager, was appointed as chairman of a new board of management at the end of 2005. This was a turning point for Brilliance.

The Market Rules

In a calculated strategy to cultivate the market, Brilliance slashed the price of its Zunchi model, formerly the Zhonghua, in January 2006. The wisdom of this move was manifest in a complete sell-out of Zunchi stock.

It was in March 2006 that Splendor charmed the market with its elegant exterior, comfortable interior furnishing and solid safety features. Designed for family use, its price was set at a relatively low RMB 100 thousand. Within five months, orders had been placed for 40,000 units.

Brilliance has been shrewd in its handling of the market. Its production capacity is geared towards output, its output to sales, its sales to profits and profits to competitive strength.

Quality the Foundation
June 2006 saw the unveiling of the first turbo-charged 1.8-litre gasoline engine ever produced in China. Its internationally-advanced turbo charging and intercooler technology meets the Euro IV Emissions Requirement, and its endurance level is double that specified by the national standard.

Peter Schippl, vice president of BMW-Brilliance held an administration board meeting of Brilliance Auto in September 2006. Schippl, who has worked in the automobile spare parts industry for five years, in an engine manufacturing facility for eight years, and who has been with BMW for 29 years, is the appointed Quality Control Manager at Brilliance Auto.

Challenges and Strategies

Despite the tremendous progress achieved in 2006, Brilliance’s new decision maker faces many challenges -- those of inadequate research and development, low profitability and market share, and deep-rooted problems in the company structure, system and technologies.

China plans to boost its market share in domestic auto brands to 60 percent by 2010. Brilliance has formulated a two-step strategy towards establishing the largest auto base in China, and possibly in Asia, with an independent research and development section. The first step is to emerge from its two-year deficit. In 2007, annual sales are expected to reach 280,000, up from 122,500 in 2005; and sales proceeds to hit RMB 40 billion, as compared to RMB 20 billion in 2005. By 2010, sales should increase to 500,000 and revenue to RMB 80 billion, doubling the 2005 figures.