Taking “High Performance, High Quality” into the Steady Development of Philippine Red

With the recent integration of Nanjing Iveco's engine business into Shang Fei Hong, SAIC's commercial vehicle power supply strategy is becoming more defined. This move marks a significant step in consolidating its internal resources and strengthening its position in the competitive automotive industry. Four years ago, when Xiao Guopu, Vice President of SAIC and General Manager of the Commercial Vehicle Division, visited the Huangmaoping area in Chongqing Economic and Technological Development Zone, the scene was quite different—marked by uncertainty and mixed expectations. Today, two modern factories stand side by side: SAIC Iveco Hongyan Commercial Vehicle Co., Ltd. (Shang Yihong) and SAIC Fiat Powertrain Co., Ltd. (Shang Fei Hong). These facilities symbolize the deepening collaboration between SAIC and Fiat, as well as the growing presence of SAIC in the Chongqing region. The official launch of the Shanghai Philippine Red production base on May 22 further solidified SAIC’s footprint in Chongqing. Just a month prior, the Shangyi Red Base, located directly opposite Shang Fei Hong, had also been completed and started operations. This strategic expansion signals SAIC's long-term vision for its commercial vehicle segment. Looking ahead, SAIC is expected to refine its plans for this division, ensuring better coordination among its various subsidiaries. Shang Fei Hong, established in June 2007 through a joint venture between SAIC Iveco Commercial Vehicle Investment Co., Ltd. (SI), Fiat Power Technology (FPT), and Chongqing Heavy Vehicle Group (CHVG), has grown significantly over the past decade. Yang Hanlin, deputy general manager of the Chinese side at Shang Fei Hong, spent two full years building the company from the ground up. He recalls the early days as "very heavy and trivial," with planning and customer visits taking up most of his time. His background in both Shanghai Diesel Engine Co. and Hino Motor Co. has helped him navigate the complexities of the industry. In Yang’s view, Shang Fei Hong is equipped with highly automated assembly lines, advanced machining systems, and a comprehensive logistics network. The company also boasts modern office facilities and a humanized management model, ensuring that FPT-branded engines produced here meet the same high standards as those made in Europe. He is confident that Shang Fei Hong’s product line will cover a wide range, including the CURSOR, NEF, and F1C series, with power outputs ranging from 70KW to 294KW and torque levels from 350Nm to 1600Nm. This broad coverage meets the needs of heavy, medium, and light commercial vehicles, construction machinery, agricultural equipment, ships, and generator sets. Although Shang Fei Hong is a relatively new brand, it benefits from close ties with SAIC Iveco, which uses its engines in models like the “Jieshi” heavy truck. In March 2009, the first mass-produced diesel engine, Cursor9, was fitted on this model. More recently, Shang Fei Hong signed a strategic agreement with Chongqing Bus Group and Chongqing Hengtong Bus to develop energy-saving and new energy passenger vehicles in the region. However, Shang Fei Hong’s ambitions go far beyond the local market. With a planned annual production capacity of 200,000 units, the company aims to serve not only SAIC’s internal needs but also external customers across China and beyond. Its export target is set at 100,000 units annually. Before its factory was fully operational, Yang Hanlin already reached out to potential partners, securing support from key distribution companies like Hualing and Yutong. Some main engine plants had even begun testing Shang Fei Hong’s products before the official launch. SAIC’s broader strategy now includes four major diesel engine plants: Shangchai, Shang Fei Hong, Nanjing Iveco Engine Company, and Yuejin Engine Co. This diversification strengthens the company’s commercial vehicle segment, making it more powerful and competitive. Despite this progress, industry analysts note that SAIC has yet to clearly define the roles and cooperation models among these entities. It is expected that Nanjing Iveco’s engine business will eventually be integrated into Shang Fei Hong, while Yuejin focuses more on light trucks. Shangchai, acquired by SAIC in 2008, is shifting its focus from construction machinery to automotive applications. Under the leadership of Xiong Weiming, the company is developing independent power platforms for commercial vehicles, aiming to provide both internal and external clients with competitive products. While both Shangchai and Shang Fei Hong offer full-range diesel engines, Shang Fei Hong’s technology, based on Fiat Power, is considered more advanced and high-end. This gives it a unique edge in the market. As the integration of Nanjing Iveco’s engine business continues, SAIC’s commercial vehicle power strategy is becoming clearer. Shangchai could serve as a backup for construction machinery and generators, while Shang Fei Hong supports the entire SAIC commercial vehicle system, including Nanjing Iveco and Yuejin. Shang Fei Hong, officially known as SAIC-Fiat Hongyan Powertrain Co., Ltd., is positioned primarily in the mid-to-high end of the market. Beyond meeting internal demand, it aims to capture external markets with high-performance, high-quality engines. Currently, Shang Fei Hong is producing Euro III engines using the Euro V platform, positioning itself as a leader in the transition to stricter emission standards. Its flagship model, CURSOR9, features a power output of 46HP/L, low fuel consumption, and compliance with Euro III, IV, and V emissions. This forward-thinking approach ensures its competitiveness in an evolving market.

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