Chinese cars challenge industry leaders

SHANGHAI, China (AP) - With models like the Hover and Roewe, Chinese-brand cars aren't household names in the U.S. and other big markets - not yet, at least.
But Chinese upstart automakers with equally obscure names such as Chery, Geely and SAIC are challenging industry leaders like General Motors, Volkswagen and Toyota in the fast-growing China market. And they're making inroads throughout the developing world with an eye toward eventually breaking into big Western markets.
Advertisement
China's homegrown automakers vie for attention with global giants like GM at the April 22-28 Shanghai Auto Show, a biennial event that will showcase China's phenomenal rise to become the world's No. 2 vehicle market.The tenfold jump in China passenger car sales in the past decade has proved a big boost to General Motors Corp., which has become the market leader in China even as it loses market share at home. GM's sales in China last year rose 32 percent to 876,747 vehicles, while Ford Motor Co.'s jumped 87 percent to 166,722 units."Detroit is so cold, but here it's so, so hot," says Yale Zhang, a Shanghai-based auto analyst with CSM Worldwide.Demand from newly affluent drivers in China lifted passenger car sales by 37 percent last year to 3.8 million units. All told, China's vehicle market - including trucks and buses - grew to 7.2 million last year, putting it second behind the U.S. with 16.5 million autos sold but ahead of Japan, with 5.7 million.Last year's top-selling model was the Jetta, made by FAW-Volkswagen, one of Volkswagen AG's joint ventures. Even Toyota, a relative latecomer to China, is gaining ground, with a 66 percent jump in first-quarter sales.China has required foreign automakers to partner with local companies, and the boom has fattened profits for nearly all, says Zhang.Domestic manufacturers are also getting a lift. Sales of small cars have surged after the government phased out urban restrictions last year on sales and use of minicars like Chery's popular QQ and rival Changan Automobile Group's CV6, a similarly egg-shaped minicar with a 1.3 liter engine.Chery, Changan and others are also ramping up exports, especially to developing countries where low prices count most.China's automakers exported about 325,000 vehicles last year, about 80 percent of them low-priced trucks and buses bound for markets in Asia, Africa, the Middle East and Latin America.Chery, based in Wuhu, a city in eastern China's Anhui province, has led the export push for passenger cars, selling 50,000 units overseas last year.The company assembles vehicles in facilities run with local partners in Iran, Malaysia, Russia, Ukraine, Brazil and Egypt and recently announced it has teamed up with Bognor SA to make bullet-proof sedans in the Uruguayan capital of Montevideo.But like many other Chinese automakers, Chery has its sights set on bigger targets.At the Shanghai show, it will show an updated version of the QQ, dubbed the "Chery A1," made in a new partnership with DaimlerChrysler AG. The Chinese side says it expects the alliance to eventually build compact cars for export to North America and Europe.Little-known overseas, SUV maker Hunan Changfeng Motors Co. put on a display at the North American International Auto Show in Detroit in January, saying it hopes to begin exports to the U.S. within two years.Rival Great Wall has gained a quirky reputation for its Hover model after shipping 500 of the SUVs to Italy last summerTags: chery geely nanjing hafei zhonghua SAIC lifan