Great Wall to double overseas facilities
Updated: 2007-10-16 17:09
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Great Wall Motor Co, a small but ambitious Chinese carmaker, plans to more than double its number of overseas plants by the end of this decade to boost sales abroad.
Wang Fengying, chief executive officer of the Hong Kong-listed maker of sports utility vehicles (SUVs) and pick-ups, told China Daily that it would have a total of 20 overseas factories by 2010. Currently it has eight.
The company, based in the northern city of Baoding, will build new plants mainly in Southeast Asia and South America, which impose relatively high tariffs on vehicle imports but low duties on spare parts, Wang said.
"These plants will help us propel our overseas sales considerably," she said.
She said Great Wall aims to sell more than 200,000 vehicles abroad a year by 2010, up from 27,500 units in 2006.
Meanwhile, it expects to lift its overall annual sales to 500,000 units from 73,580 units.
The company operates in more than 100 countries and regions. Wang said the profit margins are bigger in overseas markets.
"We are also looking at the EU and US markets to be an international brand in real terms. But we'll be very cautious as they have stricter standards," she said.
She said Great Wall will launch its three latest models as imports in the EU in the first half of next year. But she declined to reveal a timetable for the company's foray into the US, the world's biggest and most competitive auto market.
China is encouraging domestic carmakers to speed up exports through improved quality and design, though it is curbing overseas shipments of many resource-intensive commodities as part of a drive to rein in the trade surplus.
Baoding was named one of a second group of national auto and spare parts export bases last month, along with four other cities.
Many other Chinese brands, such as Chery and Brilliance, are also building more plants in foreign countries to boost overseas sales.
January-to-August exports of cars and spare parts from China, the world's second-biggest vehicle producer and No 2 market, surged by 40.3 percent year-on-year to $25.2 billion, according to industry data.
Wang said Great Wall plans to spend 10 billion yuan in the years to 2010 to develop 20 new models and build new facilities to achieve its sales target.
The company is awaiting government approval to produce sedans and multi-purpose vehicles.
"SUVs and pick-ups are insufficient to fulfill our goal. We must extend our line-up," Wang said.
Earlier this year, Great Wall raised HK$1.61 billion by issuing 151 million shares. Wang said it might return to the booming A-share market to raise more capital if it needs to fund other major projects before 2010.
The company posted 439.7 million yuan in after-tax profit in the first half of this year, up 14.7 percent.
It closed at HK$11.4 per share yesterday, up 2.52 percent.
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