GM, Ford see more export opportunities in China
Auto exports to China seem to be getting better with car makers General Motors and Ford Motor entering into major export contracts with the communist nation. Analysts believe China is gradually showing potential in its luxury car market with its rising car ownership.
The two companies have inked two contracts totaling $1.8 billion with China for exports. As per the contracts, GM will export $1 billion worth of component kits, machinery, equipment and fully assembled vehicles including the luxury Cadillac brand to one of its Chinese partners, Shanghai General Motors, through 2010. GM aims to keep its leading position in the Chinese market with the inking of this pact.
General Motors has exported over $4.2 billion worth of automobile products to China through its joint venture in the country over the past 11 years. GM has a total of eight joint ventures in China and has been the leading foreign joint venture by sales in China since 2005. Buick is GM’s most popular brand in China, the world’s second largest new car market.
Meanwhile, the other auto major, Ford Motors, has gone ahead and inked the deal in its bid to sell more than 30,000 North American-built vehicles. It has been pointed out that Ford will also supply transmission components and parts to its joint venture, Changan Ford Mazda Automobile Co. Ltd. in a deal worth $800 million.
Ford China believes that export of North America-built vehicles is among steps to expand market share in the communist country. Significantly, the company has lined up new models which will present a diverse range for the China market. It may be seen that Ford’s Chinese sales had zoomed 30 per cent in 2007, mainly aided by Ford Focus, which incidentally is one of the 10 best-selling cars in the China market place.
Industry sources added that GM and Ford inked the export contracts on the eve of the fourth round of Sino-US Strategic Economic Dialogue (SED)meet convened to discuss long-term strategic issues in bilateral trade ties.