Volvo Car Corp and its luxury automobile counterparts are taking aggressive steps to snare a bigger share of the buoyant Chinese car market, despite Beijing's stringent measures to rein in its overheating economy, company executives said.
The Ford Motor Co unit is considering manufacturing cars in China, the world's third-largest car market after the US and Japan, and expects car sales in China to grow at an annual pace of 20 percent from last year, they added.
"We are in the process of looking at the possibility but no decision has been made yet," Has-Olove Olsson, president and chief executive officer of the Swedish automaker, told reporters in Taipei on Friday, after completing a trip to Beijing to attend an auto show there.
Beijing has in recent months issued new rules limiting new auto loans and the building of new auto manufacturing facilities, aiming at consolidating its local automaking industry.
"We're not clear about what measures Beijing is taking now," Olsson said. "As car sales are closely connected with the nation's economy, we believe our Chinese sales will continue to grow in line with [China's] high economic growth."
Last year, car sales in China soared 80 percent to US$2.04 million and industry insiders expected the growth to slow this year. But Volkswagen AG, the largest foreign automaker in China, last week predicted passenger car sales growth will slow to between 18 percent and 20 percent as Beijing attempts to cool economic growth.
"The car market is calming down," Bloomberg quoted Bernd Leissner, Volkswagen's Asia-Pacific president, as saying at the Beijing Auto Show.
Beijing's measures would certainly impact car sales, according to Liu Che-wei (劉哲維), an auto industry analyst with Polaris Securities Co (寶來證券).
"We already saw an estimated 10 percent slide in car sales starting in April from the previous month, though the overall situation is still obscure," Liu said.
As Beijing imposes hefty tariffs on imported cars to protect China's auto industry, a local distributor for Toyota Motor Corp said that this could be a convenient way for the Chinese government to further control its strong auto growth.
"To a certain extent, I'll see some impact on imported cars in particular," said Steven Yang (
Despite these factors, Toyota plans to set up exclusive dealerships in China -- in Beijing, Shanghai, Guangzhou and Shenzhen -- by the final quarter of 2004, the company said in a statement released last Tuesday.
"We believe China has the potential to be the top luxury car market in the world," Akio Toyoda, a senior managing director at Toyota, said in the statement.
In the luxury car segment where Volvo is competing with Mercedes-Benz, BMW and Lexus, the total sales in China will triple to around 300,000 vehicles from 100,000 over the next five to six years, said Volvo's Olsson.
The company expected its car sales in China, the world's fastest-growing auto market, to grow at an annual pace of 20 percent from last year when it sold 2,500 cars there, said Gerry Keaney, a senior vice president of Volvo's marketing, sales and service division.
In Taiwan, Lexus has been a hit since it was introduced. Hotai's Yang said Lexus has a good shot to overtake Mercedes-Benz as the nation's top luxury car brand this year.
Hotai already sold more than 4,400 Lexus units in the five months to May, which is much higher than Mercedes-Benz's 2,900 units, he added.
"We believe this situation will be sustained through the year," Yang said.
Volvo, ranking No. 4 on Taiwan's luxury car market, targeted a 33 percent growth in car sales this year by selling 2,000 cars from 1,500 last year, according to the carmaker's Taiwan branch.
Volvo is scheduled to roll out a new sportwagon V50 later this month. Mercedes-Benz is set to unveil its new C-class car today.
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