BIZCHINA / Li Shufu
Geely to assemble cars in Malaysia
By Gong Zhengzheng (China Daily)
Updated: 2005-05-31 08:46
Hong Kong-listed mainland car maker Geely Automobile Holdings Ltd
yesterday signed a partnership agreement to assemble its own brand cars
in Malaysia.
According to Geely vice-president Zhao Jie, production of Geely cars in
the Southeast Asian country will kick off next March at a plant owned by
Malaysian manufacturers Information Gateway Corporation SDN BHD (IGC).
Employing around 500 Malaysian workers, the plant will turn out 30,000
Geely branded cars next year with components supplied from China, Zhao
said.
The first Geely car to be produced in Malaysia will be the 1.6-litre
Freedom Cruiser, the company's latest model launched last month, he said.
Two new models, larger than the Freedom Cruiser, will be introduced at
the Malaysian plant later, said Zhao.
Geely, 60.68 per cent owned by Li Shufu - one of the mainland's richest
people - will be the third Chinese automaker to produce cars abroad.
Chery Automobiles, controlled by the local government in Wuhu,East
China's Anhui Province, began to produce cars in Iran at the end of last
year.
Chery is also in talks with Malaysia's Alado Automobiles to produce cars
there.
Brilliance China Autos, another Hong Kong-listed mainland based car
maker, signed an agreement with an Egyptian partner last month to produce
cars in the North African country.
Egyptian production of its Zhonghua-brand sedans will begin at the end of
August.
As well as producing cars in Malaysia, Geely's Zhao said the company
would also export 10,000 cars to the country through IGC next year.
This year, Geely hopes to export 3,000 Haoqing compact cars to Malaysia,
he added.
"The plant in Malaysia will be Geely's manufacturing base for Southeast
Asia, which will target the whole market in the region," said Zhao.
Malaysia is one of 10 member countries of the Association of Southeast
Asian Nations (ASEAN), which have signed an agreement to slash tariffs on
automobile exports to each other.
Tariffs on vehicles imported from ASEAN members were cut to 20 per cent
at the beginning of this year from as much as 190 per cent in the past.
"Chinese-made cars will have good prospects in Southeast Asia, especially
when China reaches a free trade agreement with ASEAN," said Liang
Yangchun, an industry analyst with the State Council Development and
Research Centre.
China is in talks with ASEAN to clinch an overall free trade agreement in
2010.
"However, Chinese car makers will only be able to play in the economy end
of Southeast Asia's car market as many international auto giants, such as
Toyota, already have a strong presence there," Liang told China Daily.
"To go abroad is a good way for some Chinese car makers to expand their
business as they face mounting competition from the world's auto giants
in the slowing domestic market," he added.
All of the world's major automakers have formed joint ventures in China.
Demands for cars in China will grow by 15 per cent to 2.6 million units
this year, the China Association of Automobile Manufacturers predicted.
The growth figures are the same as in 2004 but down from more than 70 per
cent in 2003.
Zhao said Geely aims to double its overall car exports this year to
10,000 units.
In the first four months of this year Geely exported more than 3,000 cars.
(For more biz stories, please visit Industry Updates)
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