China Establishing Auto Export Bases To Boost Global Expansion

SHANGHAI, China (AP) – To help Chinese automakers expand globally, China has plans to establish eight auto export manufacturing bases, according to a report released Friday.

The Ministry of Commerce and National Development and Reform Commissions chose 160 auto and auto parts makers for the project, the official Xinhua News Agency reported, citing Vice Premier Wu Yi.

The plan to focus on eight export bases is intended to improve the industry's structure and promote technical innovation, Xinhua quoted Wu as saying.

The eight export bases include Shanghai, where both General Motors Corp. and Volkswagen AG have joint ventures; the northeastern city of Changchun, headquarters for major automaker FAW Corp.; Chongqing, home to Chongqing Changan Automobile Co., and central China's Wuhan, where Dong Feng Group is based.

The others are the southeastern city of Xiamen, home to Xiamen Golden Dragon; Wuhu, home to private automaker Chery Automobile Co.; Taizhou, production center for Geely Automobile Co., and Tianjin, where Japan's Toyota Motor Corp. has a joint venture with FAW.

The report did not mention Beijing or the southern city of Guangzhou, both of which have ambitions to build up their automaking joint ventures. Honda Motor Corp. already produces autos for export in a joint venture with Guangzhou Auto Group.

More than a decade ago, the government announced plans to develop local manufacturers into a world-class auto making industry. Since then, auto production and ownership have exploded.

China's passenger car exports more than tripled to 34,455 units in 2005 from the previous year, making it a net exporter of vehicles for the first time. But most of the cars were shipped to developing nations and failed to meet standards in Western markets such as the United States.

The industry remains fragmented, hampered by regional protectionism and heavily dependent on foreign technology. Despite their ambitions, few domestic automakers are thought to have the capability to meet stringent safety and environmental standards in top overseas markets.

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