(27 Dec 1997) Mandarin/Eng/Nat
While international car manufacturers are struggling to enter China's market, German manufacturer Volkswagen seems to have the answer.
It has invested in a factory in Shanghai which manufacturers their models in China - a project that is proving to be a big success.
But Volkswagen's dominance of the Chinese market could be threatened as Beijing looks to join the World Trade Organisation, opening the doors for other manufacturers to enter the expanding Chinese market.
It's a common stereotype in the west of Chinese transport - masses of people on bicycles.
But China's rapid economic development has improved living standards to the extent that car ownership is becoming the aspiration of many more people.
Traffic jams are becoming more and more common in China's big cities.
But auto production remains a cottage industry for most of China's 126 car makers and 4-thousand parts factories.
Due to high taxes on imports, only three out of six cars on the road are made abroad.
But the world's major car makers are now queuing to enter the expanding Chinese market.
Foreign cars exhibited in China always draw large crowds of people.
Most cars made in the country are the product of joint ventures.
One of the big success stories is the Shanghai Volkswagen corporation set up in 1985.
The Sino-German joint venture now produces 200-thousand Santana saloon cars in Shanghai every year.
That's 54 per cent of the Chinese market - for a company which only produces two models.
The partners in the project are Volkswagen A-G, Shanghai Automotive industry, China National Automotive Industry and The Bank of China.
In the factory's first ten years, they have produced three-quarters of a (m) million cars.
Huge foreign investment as well as the transfer of technology and skills created the success.
SOUNDBITE: (Mandarin)
"At present, we are leading because of the following aspects. First of all, we have the advantages of the price. Second, we offer a better service after sale. Third, our production is relatively large. And fourth, the most important of all, we have a very
experienced team, skilled workers, technicians and managing staff."
SUPER CAPTION: Qian Ping, General Director, SVW No. 2 factory
Now the factory is looking forward to 1998 when it's set to increase exports starting with countries such as Burma and Vietnam.
Despite a central government ban, local protectionism remains a problem.
In Shanghai the municipal council ordered that all taxis should be Volkswagens.
Their major rival in China is the American Chrysler Corporation, which produces four-wheel drive Jeep models in Beijing.
The factory has the capacity to produce over 100-thousand cars a year but is currently operating at only 60-percent of its capacity.
Its market share has dropped in recent years as smaller cars prove more popular with city dwellers.
The Beijing Jeep Corporation has tried to introduce new models to satisfy the changing tastes of Chinese customers.
SOUNDBITE: (Mandarin)
"What is going to happen in one year, two years, three years, is still a mystery! This is not a market that has long history in automotive that you can predict, that's like a new baby being born!"
SUPER CAPTION: Andy Okab, Vice-President, Beijing Jeep Corporation
As the automobile market is likely to continue to grow, those companies with a foothold in China are at an advantage.
However as China seeks to enter the World Trade Organisation, barriers to importers could be removed creating a new era of fierce competition for the fledgling manufacturers.
Find out more about AP Archive: [ Ссылка ]
Twitter: [ Ссылка ]
Facebook: [ Ссылка ]
Instagram: [ Ссылка ]
You can license this story through AP Archive: [ Ссылка ]
