Geely eyes Malaysian sales By Gong Zhengzheng (China Daily) Updated: 2006-05-26 08:55
Independent Chinese carmaker Geely Automobile expects Malaysia to further
relax sales restrictions on vehicles it will build in the Southeast Asian
nation, according to a top company executive.
In an interview with China
Daily, Yang Jian, Geely's executive vice-president, said he hoped Malaysia would
allow the carmaker to sell a bigger ratio of its locally-made vehicles in the
country.
Under the current rules, the firm will be able to sell just 20
per cent of locally-produced vehicles in the country.
Geely will start
producing cars in Malaysia from September with an annual capacity of 30,000
units, Yang said.
Geely, which is based in East China's Zhejiang Province
and listed in Hong Kong, last May agreed with a Malaysian partner to assemble
own-brand cars in the country.
However, Malaysia last November said it
would require the carmaker to sell all of its locally-built vehicles abroad.
In March this year, Geely was informed it would be permitted to sell 20
per cent of its made-in-Malaysia cars in Southeast Asia's No 2 car
market.
"The restrictions are unfair and discriminatory as they are only
imposed on Geely. We hope Malaysia will raise the quota," Yang
said.
Regulators from China and Malaysia will discuss the matter soon, he
said.
At present, nearly 20 foreign automakers are assembling vehicles in
Malaysia. In 2005, car sales in the nation jumped by 38 per cent year-on-year to
522,000 units. The country's top two home-grown brands, Proton and Perodua,
control three-fifths of the market.
Benjamin Asher, a Bangkok-based analyst with consultancy
Automotive Resources Asia Ltd, told China Daily that Malaysia wanted to protect
its national car programme.
"Having only recently
opened its doors to international brands, the market share for Proton and
Perodua has plummeted.
"Although the quality of Protons and Peroduas are
lower than international, mostly Japanese, brands, Chinese vehicles are still
lower than that (the quality of Protons and Peroduas)," Asher said.
"But
the Malaysian Government may still be concerned that Chinese makers will snatch
up too much of the lower end of the market, thus reducing the domestics' share
further." However, many Chinese carmakers still want to assemble cars in
Malaysia in a bid to branch out into the Southeast Asian market.
Earlier
this week, Chery Automobile, another independent Chinese car producer, agreed
with Proton to jointly study plans to make and sell each other's cars in China
and Malaysia, and elsewhere in Southeast Asia.
Hafei Automobile and
Chang'an Motor are also planning to build cars in Malaysia. Hafei is a
partner of Mitsubishi Motors. Chang'an runs car ventures with Ford Motor and
Suzuki Motors in China.
Geely's Yang said the carmaker is also
negotiating to assemble cars in Viet Nam and Russia.
The carmaker aims to
sell 1.3 million cars overseas annually by 2015, accounting for two-thirds of
its overall sales.
Last year, it exported 7,000 cars, up from 5,000 in
2004.
Meanwhile, the company's overall sales surged by half to 150,000
units.
Geely Automobile ended at 0.79 Hong Kong dollars (10.18 US cents)
yesterday, down 1.25 per cent. (For more biz stories, please visit Industry Updates)
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