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Homegrown auto industry has the bit between its teeth

(Xinhua)
Updated: 2006-11-24 10:56

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.


A model poses by a car of Chery Automobile Co displayed at the 2006 Beijing International Automotive Exhibition in Beijing ,capital of China, November 19, 2006.  [chinadaily.com.cn]

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.

The privately-owned Great Wall Motor Co., Ltd., originally an SUV producer, grabbed a slice of the compact car market this year and displayed three new models - Perey, Florid and Coolbear. Other domestic automakers, such as Brilliance, Geely and Chang'an, also had a strong presence at the auto show with a dozen brands.

It is only five years since Chery and Geely, now regarded as the flag-bearers of Chinese homegrown brands, broke into the market, with "good cars that ordinary people can afford".

These well-equipped compact cars, priced between 30,000 and 50,000 yuan, became household names as soon as they hit the market, forcing down the prices of foreign brands made by Chinese-foreign joint ventures.

However, for many years homegrown brands were regarded as low-end, substandard products in China because many of them proved unreliable. That is now a thing of the past. According to the Economic Observer, this auto show is a historic watershed -- homegrown brands such as Red Flag and Roewe are now moving into the more lucrative high-end market currently dominated by foreign automakers.
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(For more biz stories, please visit Industry Updates)



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