May boost industry
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CHINA’S second largest car manufacturer is keen to strike deals with its struggling Australian counterparts, a move that may breathe life into the Rudd Government’s $6 billion restructure of the industry.
The entreaty by Dongfeng Motor Corp, one of China’s big three state-owned car makers, follows its rival Cherry establishing a research centre in Australia, and Australian companies Futuris and Bosch subsidiary PBR using China to manufacture parts.
The brightest spot in China’s exploding automotive manufacturing sector is the green car, with the country leading the world in sales and development of electric vehicles, The Australian reports.
This is understood to be a key area of interest in Australia for Dongfeng, which dovetails nicely with the green big-car component of Canberra’s $6 billion bailout of the sector last year.
Senior Dongfeng executives plan to join a delegation from the company’s home city of Wuhan to Australia in July. The delegation, headed by the Wuhan Communist Party secretary, wants to develop new trade relationships between the 11-million strong city in central China and Australian businesses.
“Dongfeng are very keen to develop strategic partnerships with our auto industry for component supply,” Trade Minister Simon Crean said after a visit to Wuhan last week.
“What we have to encourage – because they are the big growth in autos – is our strength in the auto sector.”
In the past quarter China passed the US in the sales of regular cars for the first time. In April passenger sales rose 37.4 per cent from a year earlier to a record high, according to figures released last Friday.
“They (Dongfeng) are doing a whole lot of joint ventures,” Mr Crean said. “They want to develop their own brands. What we offer therefore is the competitive edge with design and innovation and component supply to help them to achieve that objective.”
Dongfeng already has joint-venture arrangements with Nissan, Renault and Kia. But the Chinese manufacturer’s desire to build its own brands and establish its own supply chains provides an opportunity for Australia, people close to last week’s talks say.
“The Australian auto sector basically since the Button car plan has understood the importance of innovation globally,” Mr Crean said. “Why couldn’t it be engaging with the global behemoth in autos?”
Still, a record number of China’s 61 listed car and parts makers are now posting losses.
As the small cars making up most of the volume in the market add little to manufacturers’ bottom lines, they are looking offshore for growth, while most large Western car makers conduct fire sales to ward off collapse.
Read more at The Australian.