Shanghai Automotive Industry plans to export 2,000 Santana and Passat models in 2001, the Xinhua News Agency reported.

Company president Hu Maoyuan told the agency that Shanghai is the only Chinese automotive business to have set up joint ventures with two world automotive leaders - America's General Motors and Germany's Volkswagen.

Over 40 component manufacturers in the Shanghai group have also set up joint ventures with international makers such as Delphi.

Although it exports components, Shanghai Automotive has never shipped complete vehicles. Sales in 2000 were a record 85.4 billion yuan ($US10.33 billion) but exports were only 1.11 billion yuan ($US134 million).

Hu reportedly said that high production costs was a major factor affecting the export of Shanghai Automotive's products.

Two of the group's car manufacturers, Shanghai Volkswagen and Shanghai General Motors, have an annual capacity of 400,000 sedans but sold only 250,000 Santana, Passat and Buick cars last year. Therefore, a considerable part of the production capacity has not yet been fully tapped, Hu said.

He added that cars would be exported mainly to Southeast Asia where they would be priced to compete. Those prices would be lower than Chinese prices.

Shanghai Automotive expects to earn 1.36 billion yuan ($US165 million) from exports this year and achieve an annual average growth rate of 30 percent in the next five years.

By 2005, it expects exports to exceed 4.13 billion yuan ($US500 million) with total sales of around 160 billion yuan ($US19.35 billion).

That would make Shanghai Automotive one of the top 500 companies in the world, Xinhua News Agency said.


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