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Great Wall sets sights on US

  • Source: Global Times
  • [01:47 September 13 2010]
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By Chen Xiaomin

Domestic automaker Great Wall Motor plans to make a sales push into Europe, the US and Africa despite potential obstacles to market entry, said Shi Qingke, deputy general manager of the company's international department.

"Great Wall aims to export to the UK starting early next year, allowing us to break into the Western European market,"Shi told the Global Times Friday on the sidelines of 2010 China Enterprises Overseas Development Summit. "We plan to make our debut in the US market with premium products in 2014 or 2015."

Great Wall will enter Europe in cooperation with the I.M. Group, the UK-based importer and distributor for Subaru, Isuzu and Daihatsu vehicles. Late last year, the I.M. Group announced it would import Great Wall vehicles into Europe starting this year.

"Initially, the Baltic states of Estonia, Latvia and Lithuania will be targeted. Then, starting in 2011, launches are planned in Scandinavia, the UK and Ireland," the I.M. Group said in a statement. Plans are also in the works for Belgium and Luxemburg, Great Wall's Shi said.

For ambitious Chinese automakers, expansion abroad has not always been smooth.

Potential obstacles to market entry include complex regulatory environments and heavy taxation that threaten to squeeze profit margins, Shi said.

"Besides tariffs and consumption taxes, Algeria levies a $2,000 development tax on vehicles with engines 2.5 liters and larger. But to meet requirements like that you must inject a huge (amount) into development and manpower, while keeping your prices low to maintain competitiveness."

Shi acknowledges it will take time for Chinese brands to win trust abroad.

Rival automaker Brilliance Auto, BMW's partner in China, halted car exports to Europe earlier this year after the BS4 and BS6 sedans received a cool reception at dealerships largely due to poor crash test results.

Meanwhile, Hong Kong-listed Great Wall earlier made its debut in eastern European nations like Italy, where the technical requirements are comparatively low. Western Europe, whose market-entry level is more complex, is also part of Great Wall's plans, as is Germany, home to the world's top three luxury brands BMW, Mercedes-Benz, and Audi.

Great Wall also plans to construct production facilities in Bulgaria, the Philippines, Senegal, Venezuela, South Africa, Brazil and Malaysia in the next three years.

Baoding, Hebei Province-based Great Wall is currently building new production facilities in Xushui, also in Hebei Province. Once this new facility is online, the company's combined production capacity, including their current Tianjin facility, will boost planned capacity to 2 million vehicles a year by 2015.