Its new production facility in Liuzhou began to produce the Baojun, a family car priced between 60,000 yuan and 90,000 yuan, in 2012. The plant has an annual capacity of 400,000 vehicles and 400,000 engines.

In addition to SGMW and Dongfeng Liuzhou, the city also has several other automakers producing vehicles ranging from cars to heavy trucks and special vehicles. The auto industry accounted for 37.2 percent of all industry in the city in 2012.

Solid basis

But Liuzhou's fame in the automotive industry did not come overnight.

It is the result of a solid industrial base built up in the past century and a developed vocational education system that offers strong support in quality human resources, said local officials.

Starting with sugar, iron and even coffins, Liuzhou has been a production hub in Guangxi since the late Qing Dynasty (1644-1911). In the modern era, its industries have grown to produce machinery, heavy machines and machine tools. Recently the automotive industry rose to the forefront.

Since the 1990s, the city's machinery and automobile companies rapidly modernized by importing advanced equipment, technology and investment from the United States, Germany, the United Kingdom and France.

The city's abundance in skilled labor that ranges from workers and craftsmen to technicians and engineers has proven to be another key to the auto industry's growth.

"Liuzhou people just have the genes to make and to design," said Zhou Quan, a local government official. "Do-it-yourself is a tradition in my family and many others."

There are 24 vocational schools in Liuzhou that churn out tens of thousands of well-trained young workers specializing in automobile repair, computers, benchwork and machining. "We have to control the number of students because of the limited number of teachers," said Wang Chunqiu, president of the No 1 Vocational School of Liuzhou.

Each year 800 to 900 students in auto-related programs graduate from his school.

"They are very popular with local auto companies and 99 percent of them can get job contracts before leaving school," said Wang.

"Blue-collar work is better paid and wins more respect from the society now than before." Students from rural families are exempted from tuition fees in local vocational schools due to a local government assistance program, according to the local education bureau.

In addition a variety of living subsidies are available for poor students as well as scholarships for the excellent.

"Local carmakers are more pragmatic these days. They are shifting their emphasis of recruitment from university graduates to students from vocational schools who are more hardworking, reliable and have more hands-on skills," said Pan Xuming, head of Liuzhou education bureau.

But lack of innovation in technology and management remains the largest challenge for Liuzhou's automobile industry.

"We have had the fastest improvement in management and work efficiency since we began cooperating with Nissan in 2003," said Zhan Xin, a technician with Dongfeng Liuzhou. "But many State-owned enterprises still have a long way to go before having modern management."

But even at the rapidly modernizing Dongfeng Liuzhou, its general manager for marketing Yao Liwen admitted that "we have skilled workers, but lack the talent for fundamental research".

He said that "the entire industry puts too much emphasis on output and sales, especially after China rapidly grew into the world's auto market in 2009".

"It is worrisome to see our foreign counterparts studying solar-energy vehicles when we still regard a car run on a battery as 'green'. We are simply spoiled by the easy market and will be eventually hurt by our short-sightedness," he said.

Huo Yan and Lan Lin contributed to the story