Brilliance China Automotive Holdings Ltd, BMW's partner in the country, has signed a preliminary agreement - with two United States billionaires - aimed at beginning exports of low-cost sedans to the US in 2009.

Brilliance, becoming the latest Chinese firm to unveil plans to enter the world's biggest auto market, has signed a distribution agreement with Rocket Capital Investment Group - a vehicle of Houston Rockets owner Les Alexander - and Red McCombs Automotive, executives said.

As part of the preliminary pact, Rocket Capital and magnate McCombs - a founder of Clear Channel Communications as well as Texas' largest auto dealership - will pay about $100 million to buy 10 to 15 percent of Brilliance, company Chairman Wu Xiaoan said yesterday.

Brilliance intends to join a coterie of ambitious Chinese players, including Geely Auto and Chery, keen on selling cheap vehicles in the US and Europe, to escape fierce competition at home while establishing a global presence.

Analysts say car giants from General Motors to Toyota Motor Corp fear cheaper Chinese-made automobiles will flood the globe in coming years and grab a large market share.

But many Chinese firms have run into delays breaking into the highly competitive US market because of perceptions of low quality.

"It's the world's largest market, so Chinese automakers will certainly have to sell to the US. The process will be difficult but we have no fear. Everything's difficult in the beginning," Wu told reporters in Hong Kong.

Executives hope the Zhonghua, the firm's signature sedan and top-selling model, will spearhead its overseas drive.

Wu did not outline targets. But Brilliance has sketched out European ambitions previously: The firm hopes to capture 1 percent of the market, equivalent to its current entire annual sales, with an interim goal of selling 75,000 vehicles by 2010.

Wu said the firm expects to export 10,000 Zhonghuas this year, of which half will go to Europe, mainly eastern Europe.

Reuters

(HK Edition 03/11/2008 page2)