Beijing Auto poaches R&D chief of rival Chery Auto

• Source: Gasgoo
• [13:36 August 11 2009]
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Beijing Automotive Industry Holding Co. has hired away the product-development chief from rival Chery Automobile Co., underscoring growing competition in China's crowded car industry.

Government-owned Beijing Auto tapped Gu Lei to jump-start its effort to launch a new passenger-car brand, building on its current joint ventures producing foreign-brand cars. Mr. Gu, in a telephone interview, said he joined Beijing Auto in late July and was recruited "to take charge of" Beijing Auto's effort to develop cars for the brand, to be launched in a couple of years.

The poaching of Mr. Gu from Chery, one of the top home-grown auto brands in a country where foreign makers are dominant, shows how companies such as Beijing Auto are trying to grow quickly to survive a looming industry consolidation. China's central government announced earlier this year plans to encourage consolidation of its car makers, now numbering more than 80, into a smaller group of larger producers.

To survive the consolidation, a top executive of Beijing Auto said in an interview last month that the company believes it has to be able to sell more than two million vehicles annually within a few years. That total includes volumes generated by its joint ventures with Hyundai Motor Co. of South Korea and Daimler AG of Germany, as well as Beiqi Foton Motor, a Beijing Auto subsidiary that produces big trucks.

In the first six months of this year, Beijing Auto sold 582,000 vehicles, including Foton and the Hyundai and Daimler ventures. It plans to sell 1.15 million total vehicles this year.

Launching the passenger-car brand successfully is a key element of Beijing Auto's expansion plan, the top executive said last month.

Mr. Gu, an 11-year veteran of Ford Motor Co., joined Chery in 2005. At Beijing Auto, he has taken over research-and-development duties from company President Wang Dazong, who has directly overseen the R&D operations since joining Beijing Auto from Shanghai Automotive Industry Corp. in early 2008.

Mr. Gu said the first car model for Beijing Auto's new brand is likely to come out in 2011, followed by several more models over a few years. He declined to describe those cars.

"Right now, we are looking at every possibility, and we don't know which car is going to be our first model," Mr. Gu said, referring to an array of concept cars the company unveiled at the Beijing auto show last year.

A Chery spokesman didn't respond to calls seeking comment. An engineer at Chery's R&D center said Mr. Gu has been succeeded internally by a senior Chery engineer.

(WSJ)