Homegrown auto industry has bit between teeth
www.chinaview.cn 2006-11-24 09:47:21

Special report: 2006 Beijing int'l auto exhibition

(Xinhua Photo)
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     by Xinhua writer Wu Zhi

    BEIJING, Nov. 24 (Xinhua) -- The luxury Rolls-Royce Phantom priced at 6.6 million yuan (825,000 U.S. dollars) is drawing envious glances at the ongoing Beijing Auto Show, but what makes this year's expo really different is the unprecedented number of homegrown Chinese brands.

    The explosion of homegrown brands in the Chinese auto industry in the five years since the country entered the World Trade Organization has made a mockery of worries expressed in 2001 that international competition would harm the fledgling local auto industry when the country cut customs duties and opened up its domestic market.

    According to the organizers, homegrown brands account for one third of the 572 vehicles on display, the biggest share in the history of the biennial event.

    First Automobile Works (FAW), the country's largest automaker, wheeled in 29 vehicles and 10 of them are homegrown brands. The luxury Red Flag HQ3 -- in its stretched and bulletproof versions -- was the highlight.

    The new Red Flag, no longer based on the old Audi 100 designs, was developed to rejuvenate the country's image.

    In 1958, it took FAW only 33 days to churn out China's first V8limousine - later known as the Red Flag CA72 - for late Chinese leader Mao Zedong. The model made a great stir when it appeared at the National Day celebration ceremony in the capital city in 1959.

    Zhu Yanfeng, FAW general manager, said his company will sell two million vehicles in 2010, half of which will be homegrown brands, worth a total of 200 billion yuan (25 billion U.S. dollars).

    The state-owned auto giant plans to transform itself from a loss-making enterprise into a competitive one, with priority given to developing homegrown brands and earning profit, said Zhu.

    At present, FAW's own brands are mainly cheaper models manufactured in a Tianjin-based plant and priced at about 50,000 yuan each, according to Shanghai Securities News.

    Shanghai Automotive Industry Corporation (SAIC) took part in the exhibition with the highly anticipated Roewe sedan, the company's first own-brand high-end model. Up to now, SAIC's high-end models all came from its joint venture partners General Motors and Volkswagen.

    SAIC expects to produce two million vehicles a year by 2010, including 600,000 cars marketed under local brands, said company president Hu Maoyuan.

    An advanced automotive engineering center will be built to facilitate the development of homegrown brands, said Hu.

    In its 1,100 square meter exhibition space, Chery Automobile Co. Ltd. unveiled three concept cars, five engines and a gearbox, all with proprietary intellectual property rights.

    The company, based in Wuhu of eastern Anhui Province, is one of the few Chinese companies that successfully develops and produces its own models rather than manufacturing foreign brands under license.

    Chery sold 300,000 cars in 2005, taking a 30 percent share of the homegrown passenger car market, said Yin Tongyao, chairman and general manager of Chery.

    Fifty thousand Chery cars had been sold overseas by the end of September this year.

    Asked whether domestic automakers can compete with multinational giants, Yin said that "we often underestimate ourselves, while foreign counterparts have a clearer view".

    Chery's exhibition stand has attracted top names from the auto industry, including Philip Murtaugh, vice president of SAIC. Meanwhile, Tom LaSorda, president of Chrysler Group, announced that his company is negotiating with Chery about establishing a joint venture to produce compact cars for the Dodge brand.

Editor: Wang Yan
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