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Chery to boost foreign plants

Chery Automobile Co, the biggest Chinese passenger car brand by unit sales, will build more plants abroad as part of its overseas sales strategy.

The new partner of Chrysler and Fiat plans to have 14 overseas factories by 2010 to assemble its own-brand cars, it said yesterday at a ceremony to mark its 1 millionth car at its home base in the eastern city of Wuhu. Chery now has seven plants in six foreign countries - Iran, Russia, Ukraine, Indonesia, Egypt and Uruguay. The top Chinese car exporter is planning new plants in other countries like India and Argentina, it said. Producing cars abroad will enable Chery to avoid foreign nations’ tariffs on its built cars shipped from China and will allow it to source spare parts in these countries, the carmaker said. It said the move will help it cut costs overseas to “reap more profits and improve price competitiveness”.

Chery, which started shipping cars abroad in 2001, aims to boost its overseas sales to 400,000 units a year by 2010 from 52,000 units last year, it said. In the meantime, it plans to lift its overall annual sales to 1 million cars from 305,000 units. This year, the company aims to move a total of 400,000 cars, including more than 100,000 units overseas. Chery sells cars in 56 foreign countries. Chery recently teamed up with a slew of foreign partners to make cars in China - mainly for the overseas market.

Earlier this month, it agreed with Fiat to form a 50-50 joint venture to produce Chery, Fiat and Alfa Romeo cars with an annual capacity of 175,000 units, for both the domestic and overseas markets. Chery clinched a deal with Chrysler last month to make small-sized cars under badges from the Detroit-based carmaker for the US and European markets. In June, the Chinese carmaker also agreed to form a 150,000-unit venture with Quantum LLC, an Israeli investment company based in the US, to make Chery cars for global consumers. Many other Chinese carmakers, such as Brilliance and Geely, are also manufacturing cars at overseas plants and expanding shipments to foreign markets.

In the H1 of this year, China's total vehicle exports surged by 71.3% to 241,200 units from a year ago, according to industry data. Chery kicked off car production in 2001. It now has an annual production capacity of 400,000 units in Wuhu. It is building a new 250,000-unit plant in the city, which will be operational in October. (