The Zhejiang Geely Holding Group plans to jointly establish a factory with a local car maker near Jakarta, capital of Indonesia for assembling Geely cars and will sell them in ASEAN countries in near future.
According to the agreement reached by Geely Holding Group and Indonesia-based Astra International, Geely provides equipment, technology and personnel training, while Astra offers workers and workshops.
Chinese automobile makers have targeted ASEAN as one of its major destinations for investment and car export.
"China and ASEAN are both newly-emerged, rapidly-developing auto markets. Cooperation in auto industry between China and ASEAN will bring a win-win situation for the two sides and make their cars more competitive in the international market," said Gu Xiangdong, Deputy Secretary-General of China Association of Automobile Manufacturers.
At the on-going China-ASEAN Expo, China's over ten major auto companies, including Dongfeng Group, FAW-Vollcswagen Automotive Company Ltd, King Long Motor Co, Ltd and Jinbei Automotive Company Ltd, all set up booths and show their newly-developed cars in the exhibition halls.
The Expo secretariat told Xinhua that there is an exhibition hall as large as 120,000 square meters for the China-ASEAN Expo. 20,000 square meters were occupied by domestic auto factories.
"ASEAN countries welcome China-made cars in general," said Zhang Xiaoji, director of foreign trade department under the Development Research Center of State Council.
Taking Indonesian car market as an example. A latest report released by the Ministry of Commerce said that Indonesia imports cars mostly from Japan. Now China-made sedans gain popularity gradually for more favorable price-performance ratio.
According to an inner-ASEAN agreement, from 2003 to 2009, Indonesia, Thailand, Malaysia, Philippine, Singapore and Vietnam exempted auto import tariff for each other. From 2010, all ASEAN countries will implement zero auto import tariff for each other.
Therefore, establishing auto factories in ASEAN countries will help Chinese car maker share the zero tariff in ASEAN market, said Cheng Daoran, General Manager of Dongfeng Liuzhou Auto Co.ltd.
ASEAN country also needs investment from Chinese carmakers to expand local employment and for more price-favorable cars, said a Germany auto expert at the ongoing China-ASEAN Expo.
"We are starting to see more Chinese investment into the ASEAN countries and we hope to see more," Philippine President Gloria Macapagal Arroyo said when she gathered with Chinese and other ASEAN leader here for a commemorative summit and the China-ASEAN Expo.
(Xinhua News Agency November 2, 2006)