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SHANGHAI Jan 22 Brilliance Auto, parent of
Brilliance China Automotive Holdings (1114.HK), is investing 3
billion yuan ($439 million) in a new plant in northeast China,
banking on policy support to boost sales of small cars.
The manufacturing plant, with designed annual capacity of
150,000 cars with engine sizes of 1.6 litres or smaller, is
expected to start operation in June 2010, it said on Thursday.
Brilliance's car venture with BMW (BMWG.DE) is also expanding
its workshop floor at a plant, also located in the city of
Shenyang, in preparation for the production of new models in the
future, a spokesman with the venture told Reuters.
He had no specific information on the scale of the expansion
project or the new car models to be made at the plant, which
currently produces up to 41,000 BMW 3 series and 5 series sedans
Car sales growth in China, the world's second-largest auto
market, slowed to a single-digit rate in 2008 for the first time
in at least 10 years as consumption waned with a slowing economy.
As a result, General Motors (GM.N) and many other automakers
have braked aggressive expansions this year after reporting much
slower China car sales in 2008.
In the next couple of years, the U.S. automaker will not add
new vehicle manufacturing facilities in the country, where its
total capacity is at about 1 million units, its Asia president
Nick Reilly told Reuters in December.
To help lure buyers back into showrooms, Beijing recently
unveiled a raft of policies, including halving the auto purchase
tax for cars with engine sizes below 1.6 litres.
Brilliance Auto has laid out an ambitious target to more than
triple its vehicle sales to 1 million by 2012, up from 300,000 in
2007, its chairman Qi Yumin told Reuters in April 2008.
The new car project will help the automaker realise its
mid-term target of selling 500,000 vehicles in 2010, Qi said in a
Other potential beneficiaries of Beijing's stimulus policy
package, which also includes generous subsidies to owners who
trade their high-emission farm vehicles for more fuel-efficient
and clean ones, are also bullish on market prospects for 2009.
Pick-up truck and sport utility vehicle maker Great Wall
Motor Co (2333.HK) aims for a nearly 70 percent jump in vehicle
sales this year, a company executive told Reuters on Wednesday.
Geely Automobile Holdings Ltd (0175.HK), which makes mostly
compact cars, said earlier this month it aimed for a 25 percent
rise in car sales this year.
Brilliance, which is selling in more than 60 countries,
mostly in emerging markets, is among a very small club of Chinese
automakers that have started tapping mature markets in Europe.
The firm made headlines in Europe in 2007 when it received a
rating of just one star out of five in a crash test for its BS6
sedan by Germany's ADAC auto club.
A subsequent crash test showed results that would correspond
to three stars under the official test after it improved the
car's safety standards.
Brilliance's self-developed BS6 and BS4 sedans are now
available in Germany through HSA Motors Europe, the firm's
importer for Europe, a Brilliance spokeswoman told Reuters.
(Reporting by Fang Yan, Editing by Jacqueline Wong)