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Volkswagen slashes car prices in China
By Gong Zhengzheng (China Daily)
Updated: 2004-06-18 09:38

Volkswagen has not revealed how many cars it sold in China from January to May this year, but says growth was only 3 per cent from a year ago.

To safeguard its leadership in China's car market, Volkswagen plans to invest 60 billion yuan (US$7.2 billion) and enhance its annual output in China to 1.6 million cars by 2008.

General Motors last week announced that it plans to add investment of more than US$3 billion and more than double its annual production capacity to 1.3 million vehicles in China over the next three years.

Japan's Honda car joint venture in South China's Guangdong Province said its sales stood at 58,864 units during the period, jumping 60.2 per cent from the same period last year.

Luxury automaker gears up for growth

Mercedes-Benz, the world's leading luxury carmaker owned by DaimlerChrysler, expects China's booming market to contribute significantly to its Asia-Pacific sales growth.

Joachim Schmidt, executive vice-president of marketing and sales for Mercedes Car Group, said: "China has a very special place in the Asia-Pacific, which now accounts for 10 per cent of our global sales. We aim to increase this to 13 per cent in 2005, and this will undoubtedly be powered by growth in China."

In the first five months of this year, 36,900 Mercedes-Benz passenger cars were sold in the Asia-Pacific region, nearly matching the record level of 2003.

During the period, the company's sales on the Chinese mainland surged by 60 per cent compared to a year earlier, to almost 5,000 cars.

Mercedes-Benz's target on the mainland is to sell 13,000 to 14,000 cars in the full year.

"We aim to lift our annual sales in China to 50,000 cars within the next five to 10 years, with half from local production," Schmidt said.

The company will start to produce its E and C-Class sedans next year in Beijing as part of DaimlerChrysler's strategic partnership with Beijing Automotive Industry Holdings Corp.

"China plays a crucial part in our global strategy. We will definitely continue to increase investment in China. Besides locally produced models, we will introduce more new products to this growing market," he said.

Currently, China's luxury car market is mainly controlled by Audi of Volkswagen, which kicked off local production more than 10 years ago.

More than 60,000 Audi sedans were sold in China last year.

Analysts say competition in the luxury car segment in China will grow greatly with entry of more players.

BMW started to produce its 3- and 5-series sedans late last year at its joint venture in Northeast China's Liaoning Province.

Cadillac of General Motors will produce its CTS and SRX at the world No 1 automaker's joint venture in Shanghai at the end of this year.

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