Last weekend, Tianjin FAW invited dozens of media reporters from Beijing and Tianjin for a two-day training session in Miyun. This initiative is part of a broader effort by the company to strengthen internal capabilities and reposition itself in a challenging market. In fact, this was the second outreach training organized by Tianjin FAW for its employees this year, highlighting the company’s focus on continuous development amid tough conditions.
With the current downturn in the black car market, Tianjin FAW's recent activities seem to signal a strategic shift. Since the launch of the Xiali N3 on August 8, the model has taken on a critical role in the company's future. Not only did it mark the milestone of the one-millionth Xiali vehicle sold, but it also represents the brand’s push into the economic car segment. In other words, the N3 has become a key bet for Tianjin FAW’s revival.
Internally, the company faces mounting pressure. The auto market has been particularly cold this year, and Tianjin FAW is struggling to maintain stability. The company has adopted a three-tier product strategy: Xiali remains the core base, while the NBA platform-based Ville and Vizi serve as mid-tier models priced between RMB 80,000 and 100,000. Meanwhile, the Vios and Corolla, produced through the FAW Toyota joint venture, are the premium offerings. However, the current market environment hasn’t provided the stability the company hoped for.
Financial reports reveal some concerning trends. In 2003, Tianjin FAW sold 117,335 units of Xiali and NBC sedans, with an earnings per share (EPS) of 0.181 yuan. By Q1 2004, sales dropped to 29,952 units, with EPS at just 0.01 yuan. Even though sales slightly increased in the first half of 2004, the overall profitability suffered due to price cuts and rising material costs. It’s expected that profits for the first three quarters of this year will fall by over 50% compared to last year.
The Xiali series, once the backbone of the company, now contributes little to profit. The NBC series, meant to be a mid-tier offering, also underperformed. For example, the Ville sold only 8,937 units in the first seven months of the year, while the award-winning Vizi managed just 4,179 units. On the higher end, the Vios and Corolla have also faced price reductions, leading to lower overall margins. Additionally, Tianjin FAW’s stake in FAW Toyota Motor Co., Ltd. fell from 50% to 33.12%, significantly reducing investment income.
Externally, competition is intensifying. Traditional rivals like Changan and Hafei are still strong, but new players such as Geely and BYD are making waves. The loss of taxi contracts in Beijing, where Wilo vehicles were replaced, further hurt Tianjin FAW’s market position. The outlook for the taxi market remains uncertain, adding to the company’s challenges.
Amid these pressures, the Xiali N3 has become a symbol of hope. Launched in August, it has already sold over 7,000 units within two months, offering a much-needed boost to the company. According to Su Lianyuan, deputy general manager of Tianjin FAW Sales Co., Ltd., the N3 not only strengthens the brand’s foundation but also helps retain loyal customers facing car replacement decisions.
Looking ahead, improved versions of the Ville and Vizi are in development and are expected to debut next year. Their pricing strategy will continue to emphasize cost-effectiveness, a hallmark of Tianjin FAW. Interestingly, despite the relatively high-profit margin of the NBC series, the company has focused more on the less profitable Xiali line, launching a 1.1-liter model in April and the redesigned N3 in August.
Industry analysts suggest that this strategy is tied to Tianjin FAW’s reliance on Toyota. As Deputy General Manager Tian Liming noted, the current profit levels of Xiali models remain low, and the company’s overall profit structure is unlikely to change soon. This means that Tianjin FAW will continue to depend heavily on FAW Toyota’s performance.
In conclusion, the N3 is more than just a new model—it’s a strategic move to strengthen Tianjin FAW’s independence and reduce its dependence on foreign partners. As Song Mingjun, general manager of Tianjin FAW Sales Co., Ltd., emphasized during the training, the company must unite and work together to build Xiali into a truly national and eventually global brand.
Author: Reporter Fan Shengli
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