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China car-makers focus on R&D
06-19-2006 17:13
China is hoping to move up the global value chain by boosting its technological innovation and export of hi-tech goods. With similar ambition, Chinese car makers are also revving up their plans to export to overseas.

Demand for better fuel efficiency, sturdier models and snazzier designs in low-priced cars are pushing them to spend more on research and development.

The Geely Automobile factory in eastern China is humming with activity, hoping to begin exporting to the U.S. from 2008.

The car-maker started out as a motorcycle maker in 1994. Today, it's one of the main local players pumping out cars for the nation's growing middle class, shopping for a bargain.

European and U.S. car-makers are concerned that once Chinese cars come of age and meet strict environmental regulations, they will start to flood into the rest of the world, undercutting older car-makers on price.

Geely automobile deputy CEO An huicong said: “The oil price changes will certainly have a big impact on the car industry. It's forcing car makers to raise our standards. We will have to think more about energy consumption when we design the product. It is a challenge for Geely. The rise in oil price is a natural. So we'll have to work more on energy consumption in addition to safety, comfort and design of our cars.”

Today, the mainland local tastes are leaning more towards sophisticated foreign brands. But Chinese auto-makers are rapidly gaining ground.

For thousands of China's new middle class who were relying on bicycles and buses just a decade ago, the price is right.

Car buyer Shi Conghong said: “The price is very reasonable. It's something that's affordable for people like me. The most important thing is that it's very energy efficient.”

Local car-makers captured 28.7 of the Chinese market in January - for the first time pushing sales of Chinese brands above their foreign competitors.

Geely,which means "lucky" in Chinese, is hoping its growing strength in the domestic market will give the company the experience it needs to become a major player overseas.
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