IT company DCS Group on Wednesday said its operating division, DCS Automotive, has established a new joint venture company with Sime Darby Motor Group (HK) Ltd. The JV, DCS AsiaPac Ltd, based in Hong Kong, will provide IT services to the expanding automotive market in Asia, particularly in China.

The company, set up with an initial paid-up capital of about $HK8 million, should commence operations in the first quarter of 2003. DCS Group and Sime Darby Motor Group (HK) will hold equal shares of 40% with the balance held by private investors and the JV’s management. DCS AsiaPac will combine technical expertise from DCS with Sime Darby’s knowledge of the Chinese automotive dealer market to provide IT services to this expanding sector.

DCS AsiaPac will initially focus on the Chinese market but plans to expand eventually into the 10 other countries that make up the Association of Southeast Asian Nations (ASEAN).

The company will initially launch a dealer management system called AutacWin in China.

The Chinese car market is growing rapidly. Statistics released last week show that 1.02 million cars were sold in the first 11 months of 2002, marking the first time that a million cars have been sold within a calendar year. November sales alone reached 112,521.

In early December Volkswagen, one of the first Western manufacturers to build cars in China, said it alone planned to be selling a million cars a year there by 2007.

BMW and Toyota have also recently announced ambitious growth targets while General Motors has recently shifted production of its popular Buick Sail subcompact to a new plant to make way for additional model lines it plans to launch.

Analysts say China’s car sales growth is due mainly to increasingly strong demand fuelled by a steady rise in workers’ disposable income.

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