Overseas automotive repair companies are moving forward with plans to tap China's potentially huge market as the country opens its auto service sector further after joining the World Trade Organization.
Now that China is part of the world's largest trade body, overseas investors can hold more than 50 percent stakes in auto maintenance joint ventures. Auto service firms wholly owned by foreign investors will be permitted in three years.
Shanghai AutoTech Service Ltd., a 50-50 joint venture between Hong Kong-based New World China Enterprises Projects Ltd. and Shanghai China Star Materials Group, announced the opening of its 100th Autodee quick service center in the city on Thursday.
"We have invested more than US$1.1 million since July to establish an auto quick-service network in Shanghai, banking on the city's fast-growing demand for high-quality auto maintenance service, " ac-cording to Allen Shi, project manager of New World.
The company intends to continue its fast expansion in Shanghai this year and will open its first auto service center in Beijing next month as part of a plan to build China's largest auto quick-service network, Shi said.
As a condition for joining the WTO, China lowered tariffs on imported sedans at the beginning of the year, triggering a surge in car sales. The after-sales service industry also benefited and sped up its expansion in China, analysts said.
US-based ACDelco, one of the world's leading providers of automotive parts and services, is another company that is increasing its presence.
ACDelco, a subsidiary of global auto giant General Motors Corp., said it plans to open more than 100 auto maintenance and repair centers on the mainland and in Taiwan by 2002. Among them, 13 will be in Shanghai.
As more overseas investment enters China's auto service sector, a reshuffle of the market is inevitable, industry observers said.
"The expansion of overseas companies will necessitate a revamp of 3,500 small repair garages (in the city)," said Liu Xiaoheng, chief of the Shanghai Vehicle Maintenance Management Office. "We plan to reduce the number to 500 high-quality auto service centers by 2005 to restructure and consolidate the industry."
The maintenance authority has shut down thousands of unlicensed repair shops.
(eastday.com May 11, 2002)
