Posted on Sunday, 5th September 2010 by Jesse Walker
TIANJIN, Sept 5 (Reuters) – Major Chinese automakerChongqing Changan Automobile is in talks with Ford Motor toexpand their partnership beyond China, a senior Chineseexecutive said.
Chongqing Changan, which makes Focus and Fiesta among othermodels with Ford and Mazda Motor, is joining SAIC Motor Corp,seeking to expand the tie with its foreign joint venturepartner beyond the current terms and conditions.
SAIC and its long-time partner General Motors has set up ajoint venture in India making SAIC’s Wuling brand mini trucksand vans, a move that could expand GM’s market share in Indiaand give the top Chinese automaker access to a fast growingneighbouring market.
When asked whether Changan — a front runner in China’smini vehicle segment — is planning to team up with Ford to tapoverseas markets, Zhang Baolin, president of Chongqing Changansaid: “We are having discussions with each other on that. Weare doing some studies currently.”
Zhang made the remarks on the sidelines of an industryforum in the northern municipality in Tianjin over the weekend.
Joe Hinrichs, head of Ford Motor’s operations in Asia andAfrica, told Reuters in April the Detroit automaker was lookingat a lot of future opportunities with Chongqing Changan.
But he declined to say whether Ford was seeking to takeChongqing Changan’s commercial vehicles outside China, a movethat would parallel rival GM’s earlier initiative.
Other foreign automakers, including PSA Peugeot Citroen,are also looking to expand their ties with their Chinesepartners beyond China.
The French car maker hopes to export cars made at itsmanufacturing venture with Dongfeng Motor Group to the rest ofAsia and possibly Russia as early as next year, its Asia chiefGregoire Olivier said.
“China is becoming more and more important for foreignautomakers. It’s not only a major growth engine, but also alow-cost manufacturing base which can help strengthen theirpositions in other markets,” said Zhang Xin, an analyst withGuotai Junan Securities.
CHINA REMAINS TOP PRIORITY
China, which eclipsed the United States as the world’slargest auto market last year, has been a major bright spot asthe global industry struggles to recover from a steep downturn.
But car sales in China have started to show signs ofslowdown beginning from the second quarter as Beijing pressesthe brake to keep the economy from overheating.
Despite a strong market rebound in August, many seniorindustry executives expect car sales in the country to returnto a more rational growth pattern with annual sales increase of15-25 percent in the foreseeable future.
The China market, however, would remain a major focus forforeign automakers for many years to come given the country’slow per capita car ownership, they say.
“Even 15 percent is still a very good growth. When you lookat the European market, it’s gigantic,” PSA Peugeot’s Oliviertold Reuters.
“China will still be our major focus for many years andvast exports from China is unlikely untill the market reallystarts to cool down.” (Reporting by Fang Yan and Ken Wills; Editing by David Fox) (yan.fang@thomsonreuters.com; Reuters Messaging:yan.fang.reuters.com@reuters.net; +86 10 6627 1233) (If you have a query or comment on this story, send an emailto news.feedback.asia@thomsonreuters.com)
Similar Posts:
- Ford Sheds Dead Weight (F)
- Ford Shares Shed 9% After Notching Five-year High
- China ETFs Trading on the TSX
- Asian stocks under pressure but China data helps
- China steps up Stern Hu bribe case
Tags: Changan Auto, China
Posted in Business Investing | Comments (0)