Jianghuai aims to more than double Brazil sales to 100,000 by 2015 amid China slowdown
Anhui Jianghuai Automobile Group Co. plans to more than double annual sales in Brazil by 2015 as sales growth slows in China.
Anhui Jianghuai, based in Anhui province's Hefei city, forecasts vehicle sales of 100,000 from about 37,000 in 2010, Michael Yang, project director at JAC Motors, a unit of the group, said in an interview in Shanghai.
The Chinese auto company will start building a $600 million (3.8 billion yuan) factory in Brazil's Bahia state next year.
"The factory will help cut production costs of cars sold in Brazil as demand growth is robust in the nation," Yang said.
The company seeks growth in overseas markets amid expectations that a slowing Chinese economy will curb demand and smaller companies may face difficulties obtaining loans because of tight lending policies. China's gross domestic product grew 9.1 percent in the third quarter, the least in nine quarters.
Chinese automakers such as Chery Automobile Co., Great Wall Motor Co. and BYD Co. are seeking to expand overseas as domestic sales cool from last year's 32 percent growth rate. Chinese assembly plants could build 40 million vehicles a year by 2015, outstripping sales forecasts of 27 million units, according to the National Development and Reform Commission.
Brazil growth
The China Association of Automobile Manufacturers forecasts vehicle sales growth of 3 percent in 2011, down from an estimated 10 percent early this year.
As the world's fifth largest car market, Brazil is key for China's automakers as they start a world expansion. The new Brazilian factory would start production in 2014, Yang said.
Last month, Brazil's Finance Minister Guido Mantega announced it was raising the so-called industrial products tax on carmakers. This would boost the cost of imported cars by as much as 28 percent and force foreign automakers to build key components in Brazil, he said.
Brazil, Latin America's biggest economy, will grow 3.6 percent next year, according to the median forecast in a central bank survey of about 100 economists published last week.
"We have been selling cars at a price similar to the overseas rivals," Yang said. "That shows the growth potential of the market."
