On August 7th, one hour before the China-Japan soccer final in the Asian Cup, Song Mingjun, general manager of FAW Xiali Sales Co., told reporters: “The outcome of the Sino-Japanese football match is not important. What matters is to kick our spirit. The same applies to the automobile industry. FAW Xiali is committed to developing the national car industry, just like Ford in the U.S., aiming to create a true national brand.†The next day, FAW Xiali celebrated the production of its first million cars and launched the N3 model nationwide. Since 1986, when the first Xiali hatchback was produced using the CKD method, the brand had long been a symbol of Chinese automotive innovation. However, over the past 18 years, Xiali’s dominance had faded, and it struggled to keep up with fierce competition.
In the fast-paced "Great Leap Forward" of the car market, where "fast fish eat slow fish," Xiali lost its competitive edge. It had to rely on price cuts to maintain its market presence. The launch of the N3 and the price reductions of older models signaled a new strategy—Xiali was trying to regain its former glory. Despite past successes, the current landscape was more challenging than ever. New competitors were emerging rapidly, making it hard for Xiali to catch up.
Zhang Qun, director of the FAW Xiali Product R&D Center, emphasized that the N3 was entirely self-developed, taking 18 months from concept to launch. He highlighted that the N3 featured full independent intellectual property rights, with a reinforced body (increased from 1.6mm to 2.5mm) and modern design elements such as diamond-shaped headlights, a horizontal chrome grille, and advanced features like power windows and CD stereos. The N3 came in three engine displacements and two body styles, with prices ranging from 43,800 to 59,800 yuan.
Tian Tian, deputy general manager of Tianjin FAW Group, described the N3 as a "new force" in the market, representing the brand's third-generation model. The "N3" concept stood for Nation, New, and Nice, while also reflecting the company’s goal of saving money, reducing worries, and saving time. For the first time, FAW Xiali clearly stated its ambition to build a "national car."
Song Mingjun outlined four key criteria for a national car: affordability for the common people, self-designed with full intellectual property, reasonable ownership, and high value for money. While this vision was ambitious, it remained uncertain whether Xiali could fully realize it, especially with rising competition from companies like Geely, which had already surpassed it in sales.
In 2002, after the reorganization of Tianjin Auto and FAW Group, FAW Xiali began to reshape its product lineup. With models like FAW Toyota, VITZ, and SHARI, the company aimed to stabilize its base through the N3 launch. However, despite its efforts, Xiali struggled to keep pace with the rapid evolution of the market.
With over 700,000 vehicles on the road, Xiali’s existing customer base faced an urgent need for upgrades. Retaining loyal customers became a major challenge. The N3 was designed not only to expand the product line but also to restore brand loyalty. Its Euro III emission compliance targeted the Beijing taxi market, which would play a crucial role in boosting nationwide sales.
At the same time, the auto market saw a chain reaction as BYD also announced price cuts. This highlighted the growing pressure on all automakers. While FAW Xiali’s R&D capabilities were still limited, the push for independence was seen as a positive step. The desire to reduce reliance on Toyota further fueled this effort.
Despite its challenges, FAW Xiali remained determined. As Song Mingjun said, “Our goal is that the first car used by the Chinese people should be made at FAW Xiali.†Though this dream was still far from reality, the company was taking steps toward a more autonomous future. (Reporter Wu Weiqiang)
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