China’s Great Wall Motors to start European production

21/02/2012

China has put its stamp on the European car industry by purchasing some of the region’s brands and production plants.

A previous bid to penetrate the EU’s motoring market was unsuccessful. However, China’s Great Wall Motors are now leading the way for a successful Asian presence in the region.

The firm will begin production at its Bulgaria plant on Tuesday, giving it a healthy foothold on the European market and access to roughly 500 million car buyers. The move is sure to unnerve even the biggest players in the industry.

The firm offers extremely competitive base prices on its brands, including a price range of between just €8,000 and €14,700 for its Voleex C10 model, the Steed 5 pick-up and Hoover H5 4x4. The company already has a significant slice of the market share in China, with 10 sites, and is aiming for a production figure of 500,000 vehicles in its overseas operations by 2015.

Analysts have expressed surprise that the Chinese are set on entering a market that has been loss-making for companies such as General Motors, but they can appreciate that a move into the region will increase the profile of their brands.

“It is a way for them to make progress in quality levels,” said Yann Lacroix, analyst at Euler Hermes in Paris.

Geely, one of China’s top ten manufacturers, also has plans in place to sell their mid-range Sedan for a modest figure of £10,000 by the end of 2012.

The firm, which owns Sweden's Volvo Cars, announced the plans in December and wants the Sedan to be one of many to hit the European market;

“We will be aiming to widen our range just as quickly as possible, probably at least a new model range every year for the next four to five years,” said the firm.

Chinese auto firms have also tried to increase their presence in the EU by buying out firms with a European arm. Beijing Automotive Industry Holding Co expressed an interest in purchasing General Motors' (GM) European operations when the US firm faced bankruptcy two years ago.

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