Chery chases bigger chunk of S.America market
- Source: Global Times
- [16:53 December 08 2010]
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By Chen Xiaomin
Chery Automobile Co is looking to locate its fourth South American auto assembly plant in Venezuela, part of the company's ongoing push into the region, according to a posting on the Ministry of Commerce's website Wednesday.
China's seventh largest automaker reportedly signed an agreement with the Venezuelan government late last month to jointly construct an assembly plant there, said the ministry on its website, citing local media.
According to an industry report from autosinsight.com, the Venezuela government is aggressively pushing ahead with its drive to create a state-owned auto company by linking together private equity firm ZGT Automotive Corporation and China's Chery Auto to jointly produce vehicles. The deal is being hailed as a win-win for both parties as it will help Chery boost its presence in the Venezuelan market and help the government there increase its influence in the country's auto manufacturing sector, the report stated.
Chery Automobile already started construction on a plant in Brazil last month and has three more in the region including two in Argentina and one in Uruguay.
The planned Venezuelan plant, the second auto assembly plant the Venezuelan government is involved in, is expected to produce the company's A1 and A3 model sedans, the ministry said. Chery's spokesman Jin Yibo would not confirm or deny the news of a deal with the Venezuelan government, but did add, "We are planning to restart our businesses in that market."
Chery began retailing its cars in Venezuela in 2006, only to later cease sales after running into unexplained difficulties. The need to tote the Venezuelan government line may be behind the halt in sales and Chery spokesman's elusiveness.
"It seems that the government will not accept new investment unless they are joint ventures with the state," said Venezuela newspaper El Universal, citing an anonymous source close to the automotive industry.
The automaker has 15 overseas plants in operation and exports to more than 80 nations and regions.
The company exported 10,360 vehicles in August, accounting for 40 percent of all domestic passenger vehicle exports.
