Sunday, July 30, 2006

Chinese Cars Gain Foothold in Venezuela

CARACAS, Venezuela — Chinese automobile manufacturers are seeking a share of Venezuela's car market, which has grown with the help of an oil-fueled consumption boom.

President Hugo Chavez has long been trying to foster greater economic ties with the Asian giant. On top of greater energy and mining sector cooperation, Chavez has also pursued Chinese development of a computer assembly line in the Andean nation.

Two Chinese car dealers have recently set up showrooms across Venezuela to try to compete with more established brands.

Great Wall Motors, China's largest car maker, is offering large utility vehicles.

The second, Cinascar, a Chinese automobile dealership owned by GM Daewoo Auto & Technology Co., a unit of General Motors Corp. based in South Korea, began selling vehicles in March and now has 17 showrooms across the country.

The company offers vehicles from six different Chinese car makers, including cars by Chery Automobile Co., a state-owned Chinese company that specializes in economy cars.

"We just started, but we sold 300 vehicles just last month," said Karen Frances, head of sales for Cinascar's main distribution center.

Chery's QQ model, has made up almost 50 percent of the cars sold, Frances noted.

The QQ, a four cylinder, four-door compact vehicle, sells for as little as 19 million bolivars ($8,800), cheaper than Chevrolet's Spark, its nearest competitor.

U.S. car manufacturers including GM and Ford Motors Co. assemble vehicles in Venezuela and make up the bulk of the vehicles sold every month.

Venezuela's economy soared 9.4 percent in the first quarter of 2006. Economists estimate economic growth will run between 6 percent and 8 percent this year.



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