Simon Duval Smith interviews Hu Shujie, Great Wall Motor’s vice-president of manufacturing about transplant strategies and machinery choices
Great Wall Motor (GWM), one of China’s leading privately-owned domestic carmakers, is most likely to continue to grow despite a slight downturn in demand that started in 2012. GWM showed great agility in getting out of unfashionable low-priced cars and the saloon car segment in order to concentrate on its core products; SUVs.
The company has been particularly successful with its Haval/Hover series of SUVs that offer foreign-brand features and quality at a keen price, enabled by the use of some older underpinnings, derived in part from Mitsubishi and Isuzu designs. GWM’s Wingle pickup (known as Steed in some export markets) has a near-monopoly on the pickup market in China, undercutting its Japanese rivals by up to US$10,000 in many export markets while offering comparable performance.
Since 2011, GWM has signed strategic cooperation agreements with many international suppliers and R&D experts, having previously been heavily vertically integrated in component production. These include Ricardo, Mahle, Brose, Autoliv, Valeo, TRW, Bosch and BorgWarner.
As the carmaker expands abroad, foreign suppliers will be the partners of choice, due to their existing global coverage. When asked about the possibility of developing Chinese suppliers and taking some of them with GWM, or indeed using local suppliers in say, South America, Hu Shujie, Great Wall Motor’s vice-president of manufacturing replies: “We will take our global suppliers with us, but we may consider local partners. But we must maintain the high quality that we have reached with our cars and this means staying with our supplier partners for the most important, and visible to the customer, systems.”
Of course this may not be good news for the burgeoning domestic supplier community but Hu feels they will respond well to the challenge: “The Chinese suppliers can learn from our foreign partners and, if they can supply us with high quality new technology parts and systems, we will consider their offerings also,” he vows.
GWM is rumoured to be exploring the option of setting up a manufacturing facility in Gujarat, an emerging automotive hub in India. The car maker’s export and overseas plant plans are surging ahead but in deciding whether to build full production plants (with stamping through to assembly) or CKD/SKD facilities, or simply export completely built-up vehicles (CBU) to overseas markets, the benefits of local production must be balanced against tax considerations.
“The only full production plant we have outside China at present is in Russia,” says Hu. “Taxation regimes in export countries are the primary factor in deciding our export strategy. According to our strategy, we will build some full manufacturing plants, not only assembly plants. As well as considering taxation issues, we feel that building cars locally is better for our customers – build where we sell.”
Great Wall is planning to build a plant in South America and is touring the region looking for suitable sites but is also still gauging whether to go for CKD/SKD or full production. “We are still in the stage of market research, taking into consideration the new taxation policies of the Brazilian government,” says Hu.
Going into Brazil, GWM has the great advantage that the market and the supplier infrastructure is well developed, with both established machinery and component suppliers there. As Hu says: “In Brazil, with its mature automotive industry, we believe that the transfer time – the time to develop a plant and a supply base – will be much shorter than we have found here in China in the past.”
Building to global safety standards
Chinese cars, particularly SUVs, have had some bad press in the past; the Landwind is an oft-quoted example of a disastrous NCAP test outcome. So GWM must endeavour to satisfy global safety standards. “As we sell more and more cars in the domestic market, we work towards a high safety standard, in both active and passive safety,” says Hu. “This standard is across all our vehicles and although we do have safety differences in some older lines, for future vehicles we are developing global standards that are very high.”
Hu adds: “As we look towards possibly marketing in the US and Canada, we also have to incorporate a lot of nonsafety- related features that these markets demand.”
As OEMs like GWM move towards greater exports, so one would expect to see more use of high-strength steels to improve crash performance. Will the new generation of high boron and martensite steels, in blanking, forming and welding, be part of the OEM’s manufacturing?
“We are using some different steels, thicker sections and high-strength steels in some critical areas,” says Hu. “At the new plants in Xushui County, we are building some hot-forming stations in stamping that will have automated handling, for the safety of our workers. For blanking out these parts, we will continue to use press cutting; we do use laser cutting for prototype and trial production but we find it too slow for series production. If we can carry out laser cutting at the right speed, we will consider it for making the high-strength steel parts – those of more than 1200MPa, for example.”
GWM currently uses press hemming for doors and other closures, where many OEMs are moving to roller hemming, but Hu is introducing the latter at the new plants. “At the older plant, we will stay with press hemming but at the new factories we are using a roller hemming system in a cooperation between Kuka and ABB,” he reveals.
Flexibility in new and existing plants
As with all OEMs in China, rocketing labour costs are driving a new wave of automation and how GWM will maintain its adaptability to produce new models for new segments is an important issue. The restricted flexibility of automated lines could mean building more lines to accommodate the various frame and body styles and sizes.
Hu agrees that manual labour cells are more flexible but says careful planning can help retain flexibility. “When the Baoding line was built in 2007, the automation level was very low. We have introduced automation in the right places, for example in handling in the stamping shop, where we have integrated robots into the four JIER press lines. We have two lines in body-in-white; one is much more automated than the other and this gives us the opportunity to choose the right level of automation for each vehicle project.”
Great Wall is building two new plants at its Xushui Industrial Base, in the Xushui Dawangdian Industrial Park, about 30km from the existing plant. The total size of the Xushui Industrial Base will be 3.48 million square meters and is to be constructed in two phases. The vehicle plant will have a planned production capacity of 500,000 vehicles (mainly SUV, sedan and pickup). In addition, the Industrial Base will be equipped with component manufacturing, performance test site, 4S store, living area and the first domestic annular test track, which measures about 7km in length and will allow speeds of up to 260km/h. The Auto Parts Park will be equipped with interior and exterior trim shops, chassis, rubber, engine and logistics centres.
The company is also planning a large facility in the Binhai New Area, in Tianjin, with a footprint of 3.569 million square meters. This plant will be constructed in three phases, with planned production capacity of 800,000 passenger vehicles (mainly SUV, passenger car and pickup) and components. By 2015, Tianjin Industrial Base will reach a production capacity of one million vehicles, achieving what Hu calls “leap-forward development.” Among the vehicles to be made there are the Haval H6 SUV and the C50.
“Automation levels at this new plant will be much higher than here in Baoding,” Hu reveals. “Having the different facilities quite close to each other will give us the flexibility we need to produce many platform and body variants. Not only is labour cost rising but we need to improve and maintain quality levels. Manual labour is more flexible of course but people make mistakes. Human error-proofing can only go so far, ultimately machines can be set up to not make any mistakes.”
Like many carmakers, Great Wall has set up an automation development team. “Our team is making plans for further automation, but some smaller BIW part production is not suited to ‘off the shelf ’ robotic welding solutions and we are building our own production cells – although some of these will remain as manual operations” says Hu. “We have patented some of these systems and we are very proud of them.”
Given the relentless demand for vehicles in China, how much of Great Wall’s production is in batches and how much is build-to-order? Hu explains: “Of course, every plant wants to be able to make a single specification or model of car in long runs but in China demand is very specific and, for example, a dealer may order ten units of the Haval M4 (SUV) and a single Florid (small hatchback model). To accommodate this, we would make the Havals in one long run and then a couple of days later, we would be making Florids. You could call this a semi-batch system.”
Given the variations in vehicle size and layout, has the company moved to common locators for skids, frames etc?
“We have the same locators for all the vehicles, with movable pickup points on the conveyors and frames, in BIW, paintshop and assembly. These locators help to ‘guarantee’ flexibility in all parts of the plant,” Hu responds.
Domestic machinery and labour mobility
As China is a comparatively new auto making region, most domestic OEMs have equipped their plants with the latest European, Japanese and American machinery. But Chinese machine makers are coming up fast and appear to offer solutions for most areas of production, often at very competitive prices compared to imported equipment. As to whether Great Wall would consider domestic producers, Hu says: “We are very open to approaches from all machine companies. Where a machine comes from makes no difference to us, as long as it can satisfy our needs. We consider the quality, price and service of any machine or system offered to us and decide on these criteria.”
Unlike many US, European and Japanese OEMs, Hu explains that GWM specifies and builds much of its own plants, acting as the ‘integrator’ of the various production cells, lines and systems. “Great Wall is the general contractor for building our plants. We are in the same position as say, Dürr or Kuka when they act as an integrator – we will buy the robots ourselves, we will sub-contract some areas to others but, for example, when we build the paint line, we will cooperate with a Chinese designer/architect. We do this instead of buying a turnkey paintshop from one contractor. We have compared the two ways of doing things and found that while it can also be time consuming to specify everything ourselves, we think we can save around 40% of the total investment.”
As the cost of a paintshop runs to an average of around 45% of the total cost of any given plant, how does this translate within the saving? “I think the paintshop works out at about 30% of the total plant cost,” says Hu. “This may not seem like a very big saving but with the large figures involved, it is a lot of money!”
