GM Eyeing 15% of China Market by 2004China's expected membership in the World Trade Organization (WTO) is driving global automakers to struggle for a presence in its automobile market.General Motors Corp, the world's biggest auto maker, is shooting for 15 per cent market share in China by 2004, said Lawrence Zahner, president of GM China Group. To achieve this goal, GM will lead world auto makers in investing in China's auto industry in the country's vast western region in response to the Chinese Government call for all-out efforts to develop the region. GM, which has invested more than US$2 billion in China, is negotiating with the Shanghai Automotive Industry Corp (SAIC) and the Wulin Motors Corp to establish a three-part joint venture, Zahner said on the eve of the Auto 2000 Beijing. The Liuzhou-based Wulin in Southwest China's Guangxi Zhuang Autonomous Region is the country's minivan giant. "We will improve the production lines in Wulin and technologies of its minivans and trucks,'' Zahner said. But Zahner did not announce a specific timetable for the joint venture's launch. GM will also bring its products to its joint venture with FAW-Jinbei Automotive Corp in Northeast China's Liaoning Province. According to Jinbei GM's President Ian Miller, the 50-50 joint venture will begin official production of Chevrolet Blazers and S-10 pickups beginning in 2001. Jinbei GM's initial production capacity will be 30,000 units per year, Miller said. GM and its two joint ventures, Shanghai GM and Jinbei GM are jointly exhibiting 15 models including three concept cars, a Buick Rendezvous, the Chevrolet Triax and Cadillac Evoq at Auto 2000. Zahner said GM will strengthen co-operation with Chinese partners because it does not understand the Chinese market any better than other foreign players in the country, such as Volkswagen. The German automaker is vying for more than a 50 per cent share of the car market in China, said Stefan Jacoby, vice-president of Volkswagen Asia-Pacific Region. Jacoby announced at a press conference that Volkswagen will invest more than US$1.5 billion in coming years in China. "Our primary goal, after China's WTO entry, is to diversify and renew a local line of products to satisfy Chinese consumers' mounting demand for cars, especially private buyers,'' Jacoby said. "But our local new products will meet our worldwide quality standards.'' Jacoby predicted private buyers will increase to 50 per cent of the Chinese market from current 30 per cent level in next few years. The Passat sedan, Volkswagen's milestone model manufactured at the Shanghai-Volkswagen Co Ltd plant came onto the market just days ago. The company hopes to sell 30,000 Passat sedans, which are priced from 245,000 yuan (US$29,518) to 289,000 yuan (US$34,819) this year. Passat's localization rate has reached 45 per cent to 52 per cent. The Chinese Government requires all joint venture automakers to use at least 40 per cent domestic-made components. FAW-Volkswagen Co Ltd will soon produce a mid-sized model, the Bora, next year. In 2002, Shanghai Volkswagen will introduce a compact car that meets the requirements of Chinese families for modern, yet affordable, transportation, Jacoby said. "We are also investigating a basic transportation automobile which could be produced in China for the domestic and international markets,'' Jacoby said. Volkswagen's products are featured in a 2,000-square-metre display at the exhibition, making it the largest exhibitor at Auto 2000. French auto maker Citroen has also announced ambitious targets within China's emerging auto market. The Dongfeng-Citroen Automobile Co Ltd, Citroen's sole joint venture in the country, plans to increase its market share to 14 per cent this year from 1 per cent in 1996, said the venture's general manager Zhang Shiduan. Citroen will invest an additional US$117.2 million in the joint venture to help it significantly expand its annual production capacity from current level of 150,000 units. Dongfeng Citroen's Fukang car is targeted at private buyers. It is widely viewed as a most economical car for average families. According to Michal Bricout, director of Citroen (International Affairs), the French auto maker will introduce its Picasso model into the joint venture by the end of this year. Although Ford's presence in China is small compared with its position as the world second-largest automaker, it is not ignoring the fast-growing market. Ford, the world most profitable automaker, has a long-term investing commitment in China from trucks to passenger vehicles, said Cheng Meiwei, vice-president of Ford Motor Company and chairman of Ford (China) Co Ltd. Ford now has a total investment of more than US$200 million in the country. It holds a 30 per cent stake in the Jiangling Motors Corp in Central China's Jiangxi Province. Ford and Jiangling have developed 11 versions of Transit passenger vehicles since the end of 1997. Both sides will introduce Transit trucks to Chinese consumers this year, Cheng said. Seven Ford models, including the Ikon, Escape, Focus, Lincoln, Think and Transit, are on display. |
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