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The Honolulu Advertiser
Posted on: Saturday, July 23, 2005

Makers envision sales to West

By Elaine Kurtenbach
Associated Press

A worker welds the interior of a car at the Geely factory in Ningbo, China. Geely and fellow Chinese upstart Chery Automotive are plan-ning to expand overseas, having seen sales of their compacts soar in China at a time of slowing growth for major automakers elsewhere.

Eugene Hoshiko | Associated Press

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NINGBO, China — It was one of those awkward moments for an up-and-coming automaker: as an alarm sounded, workers in bright blue uniforms rushed to rebalance an auto body that had gone awry on the assembly line.

It may be still close to its humble beginnings, but Geely Group, a privately owned Chinese car manufacturer, has global ambitions.

Geely and fellow Chinese upstart Chery Automotive are gearing up for expansion overseas, having seen sales of their compact cars soar in China at a time of slowing growth for bigger automakers like Volkswagen and Toyota.

Geely's Merrie, Maple and Haoqing economy models already are sold in almost 30 countries in Asia, the Middle East and Eastern Europe. But the company, based in Ningbo, a port city south of Shanghai, is looking further West.

"We're planning to explore other markets in Europe. We're planning to export our cars to America," An Conghui, general manager of Zhejiang Geely Automobile Co., said during a tour of the company's main factory.

"Of course there are difficulties, but we can overcome them,"An said. "Our goal is to meet the requirements of every market."

Geely confirmed last month that it was in preliminary talks to acquire molds and production equipment from bankrupt British automaker MG Rover.

The company also signed a memorandum of understanding this month with the Hong Kong Productivity Council, a government-run business promotion body, to begin development of a new car model in Hong Kong.

Geely's two mainland Chinese auto companies — Zhejiang Geely Automobile Co. and Shanghai Maple Guorun Automobile — sold 96,683 sedans in 2004, up 27 percent from 2003. It claims just over a 4 percent share of China's market for passenger cars. Geely models retail for between $3,600 and $9,600. Its top model, the Beauty Leopard sports car, sells for up to $17,000.

Until recently, China's vehicle exports were limited mainly to buses, trucks and farm vehicles sold to developing countries. But that is fast changing as automakers upgrade technology and expand production in hopes of competing internationally.

Geely exported 5,200 cars in 2004 and plans to more than double its exports this year to 12,000 units, An said. The company aims to eventually have two-thirds of its sales outside China.

Chery Automotive, whose base is further north in east China's Anhui province, has announced plans with auto importer Visionary Vehicles — run by entrepreneur Malcolm Bricklin, best known as the man who brought the Yugo to the U.S. — to eventually sell 2 million Chery model cars in the United States. The company plans to begin offering five models in the U.S., ranging from a compact sedan to an SUV, starting in 2007.

Analysts have expressed doubts, given that Chery only made 80,000 cars and exported about 10,000 last year, mainly to developing markets.