The Chinese government has taken another important step in opening its automotive industry wider to domestic private investors by allowing Brilliance Auto to produce and sell its passenger cars.

Brilliance Auto, a subsidiary of the China Brilliance Group, a privately owned financial and manufacturing company, yesterday said it has gained the go-ahead from the central government to produce and sell the company's self-developed Zhonghua-brand sedan.

"We are very pleased with the government's decision," said Sheng Jun, head of Brilliance Auto's sales division.

The government's decision came six months after it permitted Geely Group, a private carmaker based in East China's Zhejiang Province, to produce and sell cars.

Asked to comment on the decision, Su Bo, an official from the State Economic and Trade Commission, said: "It signals that the industry will open wider gradually to non-state investment with the deepening of its fund-raising reform."

State investment has dominated the industry, which now faces great challenges following China's entry into the World Trade Organization last December.

Sheng said the Zhonghua sedan, which rolled off the assembly lines last December at Brilliance Auto's plant in Shenyang, northeast China's Liaoning Province, will be launched this autumn.

"Components for Zhonghua will be purchased globally," Sheng said.

Prices of the Zhonghua model, equipped with 2.0-liter or larger engines, will range from 150,000 yuan (US$18,100) to 250,000 yuan (US$30,000), Sheng said.

Brilliance Auto plans to develop 60 franchise dealers for Zhonghua sedans nationwide by the end of this year, he added.

The company said German carmaker BMW is providing technical assistance to Brilliance Auto on the Zhonghua sedan. The two companies are awaiting the government's approval for a passenger car joint venture project.

Su said the government will approve the joint venture project "very soon." However, Brilliance Auto did not mention it at a press conference yesterday.

According to Suo Yan, spokesperson for China Brilliance Group, automobile manufacturing will be the company's core business.

China Brilliance Group, which has seven listed subsidiaries in New York, Hong Kong and Shanghai, invested more than 5 billion yuan (US$604 million) in the automobile sector over the past 10 years.

"We are seeking more cooperation with foreign partners," Suo said.

The company is also in talks with French automaker Renault to set up a passenger car joint venture in central China's Hubei Province.

Brilliance Auto said it is expected to begin production of Austin-brand cabs at its Shenyang plant in cooperation with British automaker Manganese Bronze Holdings at the end of this year.

The company also said it will launch its Grace commercial wagon on the market next month. The model is made in cooperation with Japan's largest automaker Toyota Motor Corp.

Brilliance Auto is also currently producing Sea Lion-brand buses whose sales have amounted to more than 23,000 units so far this year, the company said.

The company said it will display its Zhonghua, Grace and Sea lion brands at the Beijing International Auto Show, scheduled from June 6 to 13.

(China Daily May 30, 2002)