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 Trumpchi 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.
This has prompted some Chinese car makers to try to tap overseas
developing markets where buyers are price sensitive, usually with
limited success.
"Most of Chinese brand cars are still developed in China for
Chinese consumers, which might not be attractive to U.S.
consumers," said Macquarie Securities analyst Zhixuan Lin.
"I think it is better for GAC to focus on the China market
first," said Mr. Lin.
For success in international markets, GAC first needs to succeed
at home, he said. "The Chinese market is so huge," Mr. Wu said. "In
order to develop international markets we need to tap resources
from China," he added.
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).
Rose Yu in Shanghai contributed to this article.
Write to Colum Murphy at colum.murphy@wsj.com
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