Decision Whether To Build Russia Plant to be Made This Year
A unit of Chinese car maker Guangzhou Automobile Group Co. is considering building its first foreign car plant in Russia despite political and currency troubles in that country, a senior executive said Sunday.
“When the situation is as such, there are opportunities,” said Wu Song, director and general manager of GAC Motor Co., a division of Guangzhou Auto that produces the group’s own brand. “When there is stability, opportunity is gone.”
He said that a decision whether to build the plant will be made this year. The plant would begin with annual assembly of fewer than 50,000 cars to be assembled from kits.
Mr. Wu said the company also hopes to begin selling cars in the U.S. before the end of 2017. “Any later than that would be too late since the opportunity would be gone,” he said.
“My main goal is to make GAC Motor the very first, world-class Chinese auto brand,” Mr. Wu said.
The company was already working to identify possible dealers and exploring safety and emission-related regulations needed to sell cars in the U.S. market, he said.
Mr. Wu said he was confident GAC cars could meet such requirements since they were designed and developed with meeting international standards in mind.
He was speaking ahead of the North American International Auto Show in Detroit, which opens to media Monday.
GAC Motor, which is the only Chinese auto maker exhibiting at the show, will hold the global launch of its GS4 sports-utility vehicle Monday.
State-owned Guangzhou Auto is China’s sixth largest car maker in terms of sales. According to Guangzhou Auto’s statement to the Shanghai Stock Exchange, the group sold 1.17 million vehicles last year, up 17% from a year earlier.
Guangzhou Auto’s car sales come primarily from those made with its foreign joint-venture partners, which include Toyota Motor Corp., Honda Motor Co., Mitsubishi Motors Corp. and Fiat Chrysler Automobiles. GAC Motor and its GAC MOTOR brand of sedans and sport-utility vehicles accounted for around 116,000 of the group’s total sales in 2014, Mr. Wu said.
GAC Motor is targeting sales of its own-brand cars of between 160,000 and 180,000 cars in 2015 and one million by 2020, according to Mr. Wu.
He said the company introduced three new models last year and expects to launch two to three new models this year. The aim is to have a portfolio of 20 models by 2020, up from the current half dozen.
Chinese brands—which have never enjoyed great popularity abroad—are also suffering at home.
In the first 11 months of 2014, Chinese brands’ share of the domestic passenger-vehicle market fell to 38% from 42% in 2011, official data show.
Guangzhou Auto’s net profit for January to September 2014 grew 1.3% from the year-earlier period to 2.27 billion yuan (about $370 million).
