On August 7th, one hour before the China-Japan soccer final in the Asian Cup, Song Mingjun, the general manager of FAW Xiali Sales Co., shared his thoughts with reporters: “The outcome of the football match isn’t important. What matters is to boost our spirit. The same goes for the industry—FAW Xiali will continue to contribute to the development of China’s auto industry, just like Ford in the U.S., aiming to create a true national car.†The following day, FAW Xiali marked a milestone by rolling off its first million cars from the assembly line, and at the same time, the Xiali N3 was launched nationwide.
Since 1986, when the first Xiali hatchback was produced using the CKD method, the brand had become a well-known Chinese trademark recognized by the State Administration for Industry and Commerce. However, over the past 18 years, Xiali had been relatively quiet, losing its competitive edge in the fast-paced automotive market. In an effort to reclaim its former glory, the company has been reducing prices to maintain its market presence. The launch of the Xiali N3 and the price cuts on older models seem to signal a new phase for the brand, aiming to rekindle its former success.
Zhang Qun, director of the FAW Xiali Product R&D Center, emphasized that the N3 model was fully self-developed, taking 18 months to complete. He highlighted that the vehicle features independent intellectual property rights and represents a significant step forward in technological advancement. The N3 comes in three engine displacements (1.3L, 1.1L, and 1.0L) and two body styles—sub-hatchback and sedan—with six models available, priced between 43,800 and 59,800 yuan. Compared to previous models, the N3 features a more modern design, including diamond-shaped headlights, a horizontal chrome grille, large-opening doors, electric rearview mirrors, and central door locks.
Despite these improvements, the N3’s pricing strategy still reflects a downward trend in the brand’s value. However, it does offer better competitiveness compared to older models. Tian Tian, deputy general manager of Tianjin FAW Group, described the N3 as a “new force†in the market, emphasizing its positioning as a “national car†with a focus on affordability, quality, and innovation.
Song Mingjun outlined four key criteria for what he considers a “national carâ€: it should be accessible to the common people, designed independently with full intellectual property rights, have a strong market presence, and offer high value at a low price. While this vision aligns with Xiali’s goals, the company faces stiff competition, especially from Geely, which has seen higher sales figures in recent months.
In 2002, after the reorganization of Tianjin Auto and FAW Group, FAW Xiali took on a new identity, introducing products such as the FAW Toyota and VITZ. According to Song Mingjun, the product lineup is structured like a pagoda, with the top being the joint-venture models, the middle representing the VIB platform, and Taki as the base. The N3 is positioned as a way to stabilize the brand’s foundation and maintain customer loyalty.
FAW Xiali’s efforts to develop its own brand have not been without challenges. While the company remains a key player in FAW Group’s strategy, its reliance on Toyota has raised concerns about its independence. Analysts note that FAW Xiali’s profits are heavily influenced by its stake in FAW Toyota, which contributes significantly to its revenue.
As the automotive industry continues to evolve, FAW Xiali must navigate a rapidly changing landscape. The launch of the Euro III-compliant N3 aims to strengthen its position in the taxi market and improve public perception. With rising competition and shifting consumer demands, the path to becoming a true national car remains challenging, but the brand is determined to push forward.
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