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Jin Jing

A SPORTS car may be the ultimate dream for auto buyers who have a passion for speed. But will Chinese auto lovers be lured by home-made low-price sports cars? China's Lifan Group, which is eying to buy a Brazil-based engine plant from BMW Corp, said it would invest 1 billion yuan (US$124 million) with Germany's Zakspeed Corp to make sports cars, engines and race cars in China.

Chongqing-based Lifan would be the second domestic carmaker after Geely Automobile Co to target the low-to-mid range sports car market with prices around 100,000 yuan.

"As a latecomer in the auto industry, especially a private owned company, we must explore new areas, which are less competitive, to catch up with others, " said Wang Yanhui, vice chairman of Lifan Holding Co Ltd, one of China's leading motorcycle makers. It received government approval to start making cars last December.

The deal includes setting up a research and development center in Chongqing and manufacturing Zakspeed- and Lifan-branded engines at a new production plant, which would be used to make its racing cars in future.

Bavaria-based Zakspeed, which has a long history of cooperation with leading Formula 1 teams, is currently the only foreign motorsports specialist to roar into the Chinese market.

"The cooperation would focus more on the technology exchange, which will help Lifan increase its technical strength," Wang told Shanghai Daily yesterday, adding more details will be released by the end of May.

Zhang Xin, an auto analyst from Guotai Jun'an Securities Co Ltd, said it is possible for a Chinese automaker to design a low-priced sports car but he cautioned that output will probably be small and unprofitable.

"Making such an unprofitable and small scale production model could help Lifan to raise its brand image in its initial phase," said Zhang.

Geely rolled out its first sports car, Beauty Leopard, at the end of 2003 costing 90,000 yuan. The firm sold 1,200 units in the first quarter of this year, up 10 percent from a year earlier.

But the domestic carmakers may face an uphill task to get Chinese auto buyers to buy their sports cars on grounds of safety and reliability.

"I would rather save more money to buy a real high speed sports car made by foreign companies as the Chinese automakers may not have the capability to produce them," said a white-collar worker surnamed Dai.[email protected]
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