Japanese mini car manufacturer Daihatsu Motor Co said that it would start to assemble vehicles in China next year under its brand with a local partner. Under a technical licensing deal with First Automotive Works (FAW), China's biggest automaker, the first Daihatsu model, a multi-purpose vehicle, will roll off the production line at a FAW plant in Northeast China's Jilin Province.

Katsuyuki Kamio, executive vice-president of Daihatsu, which is 51 per cent owned by Toyota Motor Corp, said he expects to see an annual output of 30,000 vehicles in China. The firm's line-up for the Chinese market will be equipped with 1.0-to-1.5-litre engines, Kamio said. "In the future, we will possibly set up a joint venture (with FAW) to make Daihatsu vehicles," he said.

Daihatsu is apparently eager to cash in on China's booming small car market, where fellow Japanese mini car manufacturer Suzuki Motor and many local brands are selling well. "Demand for small cars will continue to grow rapidly in China as a result of favorable policies and surging fuel prices. For Daihatsu, this is a big opportunity," he said.

In the first 10 months of this year, sales of China-made vehicles with an engine capacity between 1.0 and 1.6 liters rose more than 50 per cent year-on-year to 1.87 million units, according to data from the China Association of Automobile Manufacturers. China cut consumption taxes for cars with an engine capacity between 1 and 1.5 litres from 5 to 3 per cent on April 1 to encourage people to buy smaller vehicles. The central government has been also urging local authorities to lift all restrictions on such vehicles.

Kamio said that 70 per cent of the parts used to make Daihatsu vehicles in China would be purchased locally, although the engines will be imported from Japan. In April, the Japanese carmaker established a US$30 million joint venture with FAW, also in Jilin Province, to produce auto bodies to supply its vehicles to be assembled in China.

Daihatsu executives said its China plan is an important part of Toyota's ambitious goal to control 10 per cent of China's vehicle market by 2010. The world's second-biggest carmaker, Toyota now has a market share of less than 4 per cent in China. It runs a number of joint ventures with FAW and Guangzhou Automobile Corp. sChina's total annual vehicle sales are predicted to rise to 10 million units a year at the end of this decade from the 7 million units expected this year.

Source:佚名