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Geely mulling production in Turkey

  • Source: Global Times
  • [01:44 October 21 2010]
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By Chen Xiaomin

Zhejiang Geely Holding Group announced it may consider locating production facilities in Turkey to boost its international reach, just a few short months after its subsidiary purchased Volvo from GM.

Turkey's Department of Commerce said it hopes China's automakers will build plants in the country, Geely said on its website.

The remarks were made at a meeting held October 9 attended by Chinese Premier Wen Jiabao and Geely's dealer in Turkey, Anadolu.

"Geely might build its fifth plant overseas in Turkey. But a timetable will have to be drawn up based on market potential, supply chain and technical expertise," Geely spokesman Yang Xueliang told the Global Times.

Geely already has four plants overseas located in Russia, the Ukraine, Indonesia and Malaysia.

Our focus will still be on Russia, Ukraine, the Middle East, South Africa, South America and Southeast Asia, said Yang. He added that Geely will continue to sell vehicles in Turkey through its dealers before opening a plant there, where the company's sales volume is still relatively small.

Geely will not be the first Chinese carmaker to enter Turkey. Chery Automobile Co and Dongfeng Motor Corporation have built plants in the nation.

Other automakers including Great Wall Motors also have expressed intentions to open plants there.

"Like other European countries, Turkey is enforcing stricter emission standards and other crash (test requirements). It is very hard for Chinese automakers to pass these standards," Yang Yongjing, general manager of global sales unit of Brilliance Auto, BMW's partner in China, told the Global Times.

Brilliance has yet to sell vehicles in Turkey, said Yang. He said it is hard to say when Brilliance will reenter the European market, but the company is building a plant in Ukraine, where market entry barriers are lower.

China has yet to develop an automaker that is able to squeeze into the highly competitive European market and compete with the likes of Volkswagen AG, Daimler AG and BMW.

Industry insiders said these automakers should work on their brand appeal.

"To shed the prevailing view that Chinese automakers are producing low quality cars at cheap prices, domestic firms should strive to build better brands, products and sales networks instead of competing against each other abroad," said Yang.