Jiangling Motors aims for surge in vehicle sales

Nanchang, June 14: Jiangling Motors, which is partially owned by Ford Motor Co., aims to sell 150,000 vehicles annually by 2010, up from 85,214 units in 2006, banking on demand for its products in China's rural areas, its chairman said.

''Buying power in the rural areas has improved significantly in recent years,'' Jiangling Chairman Wang Xigao told reporters at the automaker's sprawling facility in the central Chinese city of Nanchang.

''Pickups and light trucks are used as dowry by many farmers in the east coast and our products fit right into that segment,'' Wang said.

Jiangling, in which Ford holds a 30 percent stake, makes JMC and Ford-branded vans, pickups and light trucks.

Its sales were up more than 17 percent to 7.37 billion yuan (6.5 million) in 2006, and the company remained on track to meet its target for 2007 despite a slip seen in the first quarter, Wang said.

In the first two months, Jiangling sold fewer vehicles compared with the year-ago levels as it replaced older models and adapted to new emission standards, he said.

Net profit fell 38 percent to 139.73 million yuan during the period, with sales down 6.99 percent to 1.78 billion yuan.

But sales have picked up steadily since March, setting the company back on track to meet its revenue target of up to 8.5 billion yuan for the full year, he added.

To maintain the momentum, Jiangling would be rolling out two new models, a JMC light truck and a new Ford van, this year, other executives said.

Overseas

Jiangling is among a growing number of local automakers, such as Geely Automobile Holdings Co. that are pushing sales beyond their home market.

It sold roughly 7,000 of its JMC-branded vehicles abroad in 2006, or 8 percent of its overall sales, mostly to emerging markets in the Middle East, North Africa and Russia.

Jiangling President Chen Yuan-Ching said he was unsatisfied with the current level of exports, but his company would take a prudent approach.

While expanding its foothold in emerging markets, Jiangling's state-controlled parent, Jiangling Motors Group Co., has also set its sights on Europe.

It shipped some of its Landwind sports utility vehicles (SUV) to Europe in 2005, but the model failed a crash test by German auto club ADAC.

The group has since sent other models which are currently undergoing tests in Europe and Wang, who is also chairman of the group, expressed his continued interest in that market.

Other Chinese auto makers are also eager to tap mature markets and follow in the footsteps of Japanese rival Toyota Motor Corp..

Chery Automobile reached an initial deal with DaimlerChrysler in December to make compact cars under the Chrysler badge targeting the United States.

Nanjing Auto is also gearing up for a global launch of MG cars in the second half of 2007 as it moves to revive the iconic British brand it bought two years ago.

''But Rome is not built in one day. We have lot of work to do before we could take on the industry giants right in their home turf,'' another Jiangling executive said.

Reuters>