CHINA: Brilliance China Auto eyes Egyptian assembly plant for Zhonghua sedans - paper
Brilliance China Auto, German luxury car maker BMW's Chinese mainland partner, hopes to work with an Egyptian company to build an assembly plant for its Zhonghua sedans, according to the China Daily newspaper.
"We are in final talks and expect to clinch a deal next month or in April," an official from Brilliance Jinbei Automobile Co Ltd, the manufacturing unit of Hong Kong-listed Brilliance China Auto, told the paper.
The official reportedly said the as yet unnamed Egyptian firm would invest to build the plant with technical assistance from Brilliance Jinbei, based in Shenyang, the capital city of Northeast China's Liaoning Province.
Brilliance Jinbei will ship Zhonghua sedan components from the Chinese mainland to the Egyptian assembly plant.
The paper noted that, if the deal is done, Brilliance will become the latest Chinese automaker to assemble its own-brand vehicles overseas. Other Chinese automakers, including Chery Automobile from Anhui Province and Zhongxing Automobile from Hebei Province, have built plants in Iran, Egypt, Vietnam and Turkey.
"We should set our sights on both the domestic and foreign markets. Building assembly plants overseas will enable us to explore overseas markets faster than direct vehicle exports," the official told China Daily.
The official told the paper that Brilliance Jinbei started vehicle exports during the third quarter of last year, and aimed to export 6,500 units this year, up from more than 100 last year. The company's main overseas markets currently include the Middle East, Africa, South America and Russia.
"Chinese automakers could also enjoy cheaper land and labour costs to produce vehicles in those markets, which are mostly in developing nations, than in the Chinese mainland," Qian Pingfan, an industrial researcher from the State Council Development Research Centre, told China Daily.
The report said Chery plans to build new assembly plants in a number of countries, such as Pakistan, Venezuela and Syria.
"Those Chinese automakers building assembly plants overseas are less competitive players in the domestic market than the foreign auto giants. Therefore, it is a fairly good way for them to survive by entering developing countries' markets," Qian reportedly said.
China Daily said China's vehicle exports have been skyrocketing in recent years but remain tiny compared with the nation's vehicle imports. The nation exported $US779 million of vehicles last year, up 93.3% from 2003, according to official statistics.
In contrast, the value of China's vehicle imports totalled $5.4 billion last year, the report added.