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China's Geely to develop high-end
car in HK
BEIJING - Geely
Automobile, the No 1 privately-owned car maker in
the Chinese mainland, said recently that it plans
to jointly invest HK$1.44 billion (US$185.2
million) with the Hong Kong Productivity Council
to develop a high-end car and components. The car,
to be named GH1 and sporting a 3.0 liter engine,
will be produced in Hong Kong within the next 24
months, said Li Shufu, chairman of Hong
Kong-listed Geely.
The plans come one
month after Geely and the Hong Kong Productivity
Council - a government-sponsored organization
aiming to promote productivity throughout Hong
Kong business sectors - signed a memorandum of
understanding for collaboration in the development
of the first Hong Kong-made car and its associated
components. Component producers from Hong Kong,
who mainly invest in the mainland, will also
participate in the development of the car, the two
sides said in a statement. The car will target
both the mainland China market and overseas
markets.
"We could benefit from the CEPA
(Closer Economic Partnership Arrangement)
advantages, even though labor and land costs are
higher in Hong Kong than on the mainland," said
Yeung Kwok Keung, executive director of Hong Kong
Productivity Council. The CEPA was implemented
last year to facilitate Hong Kong's exports to,
and investment in the mainland. Hong Kong-made
cars will be exempted tariffs in the mainland if
more than 30% of their total costs, including that
of development, come from Hong Kong, Yeung said.
"The car market in the mainland is booming, and we
will have big opportunities," he said.
China is the world's third largest and
fastest-growing vehicle market. Sales of Chinese
made vehicles reached 2.79 million units in the
first half of this year, up 9.25% from a year ago.
The nation's total auto demand is predicted to
rise 12% to over 5.6 million units this year.
Citing Nanjing Automobile Group's takeover of
British collapsed car maker MG Rover last week, Li
said: "The world's vehicle manufacturing is
shifting towards China, which enjoys relatively
lower labor and land costs than the developed
countries." All of the world's major automakers
have set up joint ventures in China with local
partners.
Geely, one of a few independent
Chinese car manufacturers, aims to sell 140,000
cars this year, up from 100,000 units last year,
according to Li. In the first half of this year,
the company's sales grew by 6.3% to 60,000 units
from the same period of last year. Previously a
motorcycle and real estate conglomerate, the
company started to make cars in 1998, and is now
producing low-cost cars in East China's Zhejiang
Province and Shanghai. The company expects to
double its exports to 10,000 cars this year from
last year. In May, Geely clinched a deal with a
Malaysian partner to assemble its cars in the
Southeast Asian country.
(Asia
Pulse/XIC) |
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