"Foton Motor's Foshan Sanshui plant will become the company's largest plant in South China." At the groundbreaking ceremony for the new plant, Wang Jinyu, general manager of Foton Motor Group, stated that according to the plan, the project has a total investment of 3.2 billion yuan, and once the first phase is fully operational, it will contribute 36 billion yuan in annual sales revenue to Foton Motor.

A rough estimate by the reporter, based on the company's average gross profit margin of 12.2% for its main automotive business in 2013, suggests that once the Foton Motor Foshan Sanshui plant is fully operational, the sales profit generated could exceed 4 billion yuan per year.

Annual sales revenue of 36 billion yuan

Last week, Foton Motor held a groundbreaking ceremony for its new Foshan Sanshui plant in Foshan, Guangdong Province. It is understood that since 2012, Foton Motor has been laying out a South China headquarters integrating R&D, procurement, supply, and sales. According to the plan, the Foton Motor Foshan Sanshui plant project will be implemented in two phases, with the first phase planning to build a pickup and SUV plant with an annual production capacity of 240,000 vehicles, to be put into production before December 31, 2015. Once the first phase is fully operational, annual sales revenue will be 36 billion yuan, and products will be exported to more than 40 countries in Asia, Africa, Europe, and the Americas.

"After the project is put into production in 2015, it will still take several years to reach full capacity. Conservatively calculated at a 10% gross profit margin, the profit generated after full capacity will exceed 3 billion yuan," a relevant person from Foton Motor told the reporter.

According to Foton Motor's 2013 annual report, the company's automotive industry gross profit margin was 12.2%. Among them, the gross profit margin for light trucks was 12.67%. Based on this rough estimate, calculated at an average gross profit margin of 12.2%, once the Foton Motor Foshan Sanshui plant is fully operational, the sales profit generated could exceed 4 billion yuan per year.

The company's 2013 annual report shows that Foton Motor achieved operating revenue of 34.15 billion yuan in 2013 and a net profit attributable to shareholders of the listed company of 763 million yuan. It must be said that the full operation of the new plant will bring a qualitative leap to Foton Motor's performance.

At the same time, according to Foton Motor's "2020 Strategy," by 2020, Foton Motor's global annual sales will exceed 3 million vehicles, with sales revenue exceeding 330 billion yuan. The key to supporting this goal lies in Foton's overseas markets, namely its "5+3+1" strategy, and the production of the Foshan Sanshui plant is also an important part of this strategy.

Among them, "5" means building five overseas plants in India, Russia, Brazil, Mexico, and Indonesia respectively; "3" means breaking into the three highest-end global automotive markets of Europe, Japan and South Korea, and North America by producing high-end complete vehicles and engines; "1" means using China as the global operations center to achieve a leading position in the Chinese and global automotive industries.

Total project investment of 3.2 billion yuan

It is understood that the Foton Motor Foshan Sanshui plant covers an area of 933.69 mu, with a total investment of 3.2 billion yuan. On August 9, 2013, Foton Motor signed a "Strategic Cooperation Agreement on the BAIC Foton PC6010 Project" with the Foshan Municipal People's Government and the Sanshui District People's Government of Guangdong Province. After the project is completed, the current Sapu plant located in Nanhai District, Foshan City, will be relocated to this plant.

The plant will mainly be used to produce pickups and SUVs. "I think the domestic SUV market will still be good before 2020," the aforementioned Foton Motor person told the reporter.

As for pickups, the person believes that pickups, which fall between commercial vehicles and passenger vehicles, have always accounted for a significant proportion of Foton Motor's products, and the company is already very mature in terms of products and channels. "Now many cities no longer restrict pickups from entering the city. Previously, pickups were not allowed to enter the city mainly due to emission issues. If the emission problem is solved and there is no pollution, in the future, with the government's adjustment of pickup policies, restrictions on pickups may be lifted to allow them to enter the city, and pickups will definitely have great development in the future."

In his view, pickups represent a free lifestyle, and more people are beginning to pursue such a lifestyle. "The domestic automotive consumption culture has shifted from sedans to multi-functional vehicles. Pickups can solve many problems, such as weekend trips to the suburbs, where pickups can hold many large items such as tents and bicycles. Pickups will definitely be welcomed by consumers in the future."