China's emerging carmaker Chery Automobile Co on Friday said it had agreed
with Argentine industrial group Socma SA to assemble cars in Uruguay in May, its
latest move to branch out abroad.
Chery, owned by the government of Wuhu city in the east, said that the two
parties will form a joint venture in Uruguay to make Chery-branded cars with
auto parts from China, Argentina and Brazil.
The Chinese company's deputy sales chief, Jin Yibo, told China Daily that it
will hold a 51 percent stake in the venture, and Socma the remaining 49 percent.
The venture, with an initial investment of $10 million, will have an annual
production capacity of 25,000 cars next year, Jin said.
Chery said the venture will build two models - a Tiggo sports utility
vehicle, the other has still to be decided.
"These vehicles will be sold mainly in Uruguay and Argentina," Jin said.
The venture is Chery's sixth overseas manufacturing base after those in Iran,
Indonesia, Egypt, Ukraine and Russia.
Chery is the No 7 Chinese vehicle producer according to 2006 sales, but it is
the nation's top car exporter.
The company announced in January that it aims to sell at least 70,000 cars
abroad this year, up from 50,000 units in 2006.
Meanwhile, it expects to lift its overall sales to 393,000 units from 305,000
However, Chery's plan to sell its cars to the United States this year has
been delayed, as US firm Visionary Vehicle LLC said in November that the two
sides had halted talks to form a joint venture to make cars for the world's
biggest and most competitive car market.
In January, Chrysler, said it had agreed with Chery to assemble its cars in
China for the North American and European markets.
China's vehicle exports have been growing rapidly in recent years boosted by
domestic manufacturers' accelerated efforts. But a vast majority of them are
In 2006, the nation's overall vehicle exports doubled to 340,000 units from
the previous year with that of passenger cars tripling to 90,000 units.
Analysts predict that domestic automakers are expected to sell a total of
500,000 units abroad this year.
A group of other Chinese carmakers, such as Huachen Automotive, Geely
Automobile, Great Wall Motors and First Automotive Works Corp also have plans to
Chery said earlier that it planned to launch seven new models this year to
fulfil its 2007 sales target.
Its Argentine partner, Socma, now has a plant in Uruguay's capital Montevideo
where Peugeot and Fiat manufactured cars in the 1990s.
Sales of China-made vehicles grew by a quarter to 7.22 million units last
year from 2005, enabling the nation to surpass Japan as the world's
second-biggest auto market.