Brilliance China Plans Egypt Auto Assembly
Plant
Brilliance China, a leading Chinese auto manufacturer
and BMW Chinese partner, is planning an auto assembly
plant in Egypt to manufacture its own Chinese Zhonghua
sedans.
Brilliance is based in Shenyang in China's northeast
province of Liaoning, the traditional home of China's
heavy manufacturing industries. It has been one of the
few companies which has been able to do well in the area;
many of the other companies are older state-owned enterprises
(SOEs) which are being broken and privatized. The re-organization
of the northeast Chinese economy has been a priority
for the administration of Chinese premier Wen Jiabao.
Increased demand for autos in China has meant that the
major international makers such as GM, Volkswagen, Ford, DaimlerChrysler and Toyota have
all poured into China, expanding production capacity
and increasing their Chinese domestic marketing and advertising
expenses.
The smaller Chinese auto makers, which do not have the
capital to compete with these companies, have moved their
manufacturing out of China to Africa and
central and south America, where they can leverage their
lower development and operating costs and experience
making vehicles for less-developed countries.
The current Chinese market has over-capacity, which
means that makers will be forced to export their Chinese
made models to other markets. In addition, a credit-tightening
policy has meant that fewer Chinese are buying cars.
The winners in the Chinese market are those makers which
can establish presence through new energy-saving technologies.
As the world's second-largest consumer of oil and gas,
petroleum imports are taking an ever-larger part of Chinese
imports. These costs are passed on down to the Chinese
consumer.
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