China's Brilliance sells in Europe, in U.S. talks

GENEVA (Reuters) - Chinese automaker Brilliance Jinbei Automobile Co. is starting talks about establishing a U.S. sales network after it recently began exporting to Europe, the European distributor for the automaker said on Tuesday.

With a U.S. launch, Brilliance could become the first Chinese automaker to sell its own brand into the U.S. market -- the world's largest and most lucrative -- after highly publicized ventures by rivals have run into delays.

Brilliance Jinbei, an affiliate of Brilliance China Automotive Holdings Ltd (1114.HK), is determined to create a global market for its brand, Hans-Ulrich Sachs, the entrepreneur directing the automaker's European sales, told Reuters.

Brilliance has already begun shipping sedans from its factory in Shenyang to Germany, where they are due to begin arriving this month.

Sachs, managing director for the Luxembourg-based HSO Motors Europe, said negotiations on a similar distribution network for the U.S. market are beginning.

"They have made first contacts just recently in the United States, and there is something in the pipeline," Sachs told Reuters on the sidelines of the Geneva auto show.

Sachs did not elaborate, and a representative of Brilliance could not immediately be reached for comment.

China's Chery Automobile Co. has struck a deal with DaimlerChrysler AG's DCXGn.DE Chrysler Group to build Chrysler-branded vehicles in China for export to the U.S. and Europe. The deal awaits approval from the Chinese government. Chery abandoned an earlier plan to sell its own brand into the United States.

Brilliance, meanwhile, has outlined ambitious targets for Europe, where it expects to take 1 percent of the market -- the equivalent to annual sales of about 150,000 vehicles -- with an interim goal of selling 75,000 vehicles by 2010.

The company also became the first Chinese carmaker to exhibit at the Geneva auto show, one of the industry's largest global trade venues.

EUROPEAN PLANS

Brilliance Jinbei automaker plans to begin by selling a sedan in Europe known as the BS6 priced between 19,000 and 23,000 euros ($30,213), Sachs said.

By 2010, it expects to offer a five-model line-up including a coupe, a smaller sedan, a compact car and a sport utility vehicle, he said.

Diesel offerings are also in the works, said Sachs, who negotiated a five-year exclusive contract to distribute Brilliance vehicles in Europe last year for his Luxembourg-based firm, HSO Motors.

"In our industry, you are successful if you are above 1 percent (market share)," said Sachs. "If you are below 1 percent, then you are more or less an amateur. You are, as the Italians say, a dilettante."

He added: "I can't give you a promise of when we will get there, but at 1 percent we will be playing in the first league."

Sachs, who spearheaded Hyundai Motor Co's (005380.KS) initial exports to the German market in 1991 and later served as a brand manager for Volkswagen AG (VOWG.DE), said Chinese automakers would become established faster than their Korean or Japanese predecessors did.

Brilliance, like other Chinese automakers, will face initial skepticism from consumers concerned about vehicle safety and quality, he said.

The automaker is offering a warranty of three years or 100,000 kilometers, but Sachs said he expected Brilliance to borrow from Hyundai by extending an industry-leading warranty.

"Brilliance will do this. I am deeply convinced," he said. "They learn very, very fast. They are very open-minded."

HSO has signed distribution agreements for Brilliance with companies representing 160 dealers in France, Germany and Belgium, Sachs said. The goal is to have 750 European dealers for the brand by the end of 2008, he said.