Leading Car Makers Eye More Than Sales in China

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SHANGHAI -- Many multinational automotive companies no longer see China as a sales market only,[link widoczny dla zalogowanych], but are making it an important manufacturing, outsourcing, exporting and regional research base.
Such a move is highlighted at the Shanghai Automobile and Technology Exhibition,[link widoczny dla zalogowanych], which opened on Sunday to public visitors.
Visitors walk around a Ryuga Mazda car on display during The Shanghai Auto Show in Shanghai April 21, 2007. [Reuters]
Rick Wagoner, chief executive officer of the U.S.-based General Motors (GM), said in Shanghai the company would double its production capacity in China by 2010.
Business insiders said that more and more international auto makers would become inclined to base their production in China, attracted by the country's low labor cost and workers with sophisticated skills.
Ford China chairman Cheng Meiwei,[link widoczny dla zalogowanych], also vice president of U.S. auto manufacturer Ford, told Xinhua at the exhibition that China was becoming the most important outsourcing center globally for Ford, and automotive spare parts made in China were assembled in Ford-brand vehicles all over the world.
The GM sedans under the brandname of Chevrolet, produced and sold in the U.S., were also made with many parts from China, just like Ford did.
Statistics from the country's customs show that China exported 11.5 billion U.S. dollars worth of automotive spare parts, accessories and auto bodies in 2006, outpacing the imports by four billion U.S. dollars to report its first-ever surplus in this trade sector.
Wei Jianguo,[link widoczny dla zalogowanych], vice minister of commerce, also saw great potential in the country's export of vehicles and automotive spare parts, forecasting more international auto companies would build China into an important outsourcing base for them.
Japan-based Honda already established a sedan production center in the country's manufacturing hub of Guangzhou to replace its factory back in Japan to produce autos that were for sales in Europe.
Yin Tongyao, general manager of China's domestic auto maker Chery, told Xinhua many multinationals had extended hopes to manufacture their brand-name vehicles in Chery factories for sales back in their home countries.
A Buick-brand concept car of GM debuted on the Shanghai auto show actually involved staff from the United States and China with core ideas from a joint technology center organized by GM and its joint venture Shanghai GM, a token of China's growing presence in the research work of multinational auto companies.
Major names like Toyota, Honda and Volkswagen are planning to switch more research and development projects into China, and some preparing to establish a research center in China.
Foreign brands took a 75 percent share of the Chinese market for sedan cars last year, with the top three best sellers being Shanghai GM,[link widoczny dla zalogowanych], Shanghai Volkswagen and FAW Volkswagen, all of which are Sino-foreign joint ventures that mainly produce cars with foreign brands.