China's largest private car maker, Geely Automobile, aims to sell more than 60 per cent of its annual output to overseas countries and regions in ten years, a company official has revealed.

The Hong Kong-listed auto maker also plans to start shipping vehicles to Mexico and South Africa this year, Executive Director Lawrence Ang Siu-lun told China Daily.

And it will export at least 10,000 sedans to Malaysia this year, he added.

"We're positioning ourselves as a global car maker, not just a small domestic low-end supplier," he said. "(To achieve that goal) we must export. But we will do it step by step."

The Zhejiang-based auto maker has set a goal to export 8 per cent, or 11,200 units, of its estimated annual output of 140,000 vehicles this year. In 2004, it sold 5 per cent, or 5,000 cars, to overseas countries and regions.

Talking about the exporting destinations, Ang said Geely would, at this stage, focus on developing economies.

"Considering entry requirements and all-round costs, developing countries offer us more opportunities," he said.

Geely has been actively expanding its market network in the Middle East, North Africa and South America. It has sold its cars in 30 countries and regions, mainly to Egypt, Syria and Yemen.

As for Southeast Asia, Ang said Malaysia and Thailand would be the company's first stops.

In May, Geely signed a five-year deal with Malaysia's Information Gateway Corporation SDN BHD (IGC) to assemble and export its own brand cars in Malaysia.

"By this agreement, we are poised to set our foothold in Malaysia and Thailand this year," Ang said, adding that Geely would begin to produce cars in Malaysia under a co-operation pact with IGC in September next year at the earliest.

"When the model is okayed, it will allow us to enjoy the lower tariffs of assembly parts and favourable conditions to export," he said.

Geely's overseas expansion comes at a time in which it seeks to divert from shrinking domestic sedan demand and competition on compact vehicles from foreign rivals.

Geely management earlier said in April that China's sedan sales volume growth could slow to 10 per cent in 2005 at 2.5 million units, compared to 16 per cent growth last year and the blistering 75 per cent surge in 2003.

Drive to high end

The Hong Kong-listed car maker, which mainly produces low-end cars of prices set to 30,000 yuan per unit, however, revealed its determination to evolve into a medium-to-high-end car supplier.

"At present, our competitiveness is still based on price, which is normally 20-30 per cent lower than our counterparts," Ang said.

"That's not our ultimate goal. What we want is to move up and up."

"Our strategy is to firstly solidify our foothold in the second-tier marketplaces. When our expansion ground is mature, we will set our sights on the top-tier markets in the US and Europe."

However, he confessed that Geely does not expect this to happen in the coming five years.

Geely, previously a motorcycle and real estate conglomerate, started to make cars in 1998. It is one of a few independent Chinese car manufacturers.

(HK Edition 08/02/2005 page3)