Brilliance China Auto, the partner of German luxury carmaker
BMW, says it plans to make its mark in the United States with its
own-brand cars. The move comes on the back of the automaker's
recent decision to withdraw its listing on the New York Stock
Exchange (NYSE).
The company says that it is in discussions with some unnamed
American firms to foray into the world's biggest but most demanding
vehicle market.
The first model planned for the US market is a Zhonghua Zunchi
1.8-liter turbo mid-sized sedan, which has passed testing in the
country, Brilliance says.
"We believe that we will make some headway in the US soon," it
says, without revealing a timeframe and sales goal.
The plan comes on the back of a recent decision to withdraw its
American Depositary Shares, which represent 100 ordinary shares per
1 cent of the firm, due to its wilting trade volume and rising
administrative costs.
The company surprised the corporate community in China in 1992
when it was registered in Bermuda by its former controversial
chairman Yang Rong, and floated in New York.
But the carmaker says it will keep its listing in Hong Kong,
which dates back to 1999.
Michael Yang, executive director of NYSE Group Asia-Pacific,
sees Brilliance's NYSE delisting plan as nothing strange.
"It's a normal move as the company has been unable to raise
enough money (on the NYSE) - although it's a pity for us," Yang
says.
Brilliance is already focused on the Hong Kong stock market,
which is the biggest overseas stock destination for mainland
companies.
Analysts say it will possibly return to the thriving domestic
stock market to raise money to fund its expansion in China and
overseas.
Brilliance says the US export drive is an important part of its
ambitious goal to sell more than 30 percent of its vehicles
annually by 2010, up from 3.1 percent last year.
Meanwhile, the company aims to boost its overall sales to
500,000 vehicles from 210,000 units, it says.
In the first half of this year, its sales surged by 57 percent
to 146,000 vehicles, including more than 7,000 units sold
abroad.
Brilliance is making the Zhonghua sedans and mini-vans under
another own-brand Jinbei at its home base in the northeastern city
of Shenyang. It also runs a joint venture with BMW in the city,
assembling the 3 and 5 Series sedans.
Last December, the Chinese carmaker secured a deal to ship a
total of 158,000 sedans to Europe in the next five years.
But it has faced a safety problem in Europe as the BS6 only
achieved a rating of one star out of five in a recent crash test by
Germany's ADAC auto club, making headlines in German
newspapers.
A BS6 dealership in Antwerp, Belgium last week halted sales of
the sedan.
Brilliance accused German media of "viciously playing up" the
test results, saying it will improve the BS6's quality and strive
to reach a rating of three stars within a year.
It stresses that the issue will not affect its plan in Europe
and it will further extend its sales and service networks
there.
The company is also building a 150,000-unit plant in the smaller
southwestern city of Mianyang, partly to further explore the
Southeast Asian market.
The new plant, to be operational next year, will make
Brilliance's own-brand Jinbei mini-vans, pickups, light trucks and
sport utility vehicles.
Brilliance also runs a plant in Vietnam making Jinbei light
trucks with kits from China.
The group also has a plant in Egypt to assemble the Zhonghua
sedans.
It is building another plant in the Democratic People's Republic
of Korea with the Republic of Korea's industrial group PMC to make
the Jinbei mini-vans.
Brilliance says it plans to increase the total number of its
overseas dealerships to 53 at the end of this year from 41 at
present.
A legion of other Chinese carmakers including Chery and Geely
are also speeding up their overseas expansions.
China's overall vehicle exports jumped by two-thirds to 188,700
units in the first five months of this year from a year ago,
according to industry data.
(China Daily July 16, 2007)
