Geely may downsize assembly project in Mexico

Chinese car maker Geely Automobile Holdings said on Thursday its parent may downsize a planned $500 million car assembly project in Mexico due to the global financial crisis.

Geely Holding Group, parent of the Hong Kong-listed unit, is evaluating the Mexican project and could cut down its size due to the tough macroeconomic environment, Chairman Li Shufu told reporters on the sidelines of China's National People's Congress.

The holding firm has signed a memorandum of understanding with a Mexican partner to build an industrial park including a car assembly plant that it hopes will have the capacity to manufacture 300,000 vehicles a year.

The assembly plant is expected to be injected into the listed unit, which is seeking to enter the American market.

Geely, which is trying to shake off its image as a purveyor of low-priced cars, is one of a handful of Chinese automakers eyeing America.

The automaker also plans to compete in the Taiwan market this year. "We definitely can export Geely Panda cars to Taiwan this year," Li said.

Geely aims to sell 250,000 cars in 2009, which it hopes to boost further to 2 million by 2015 with about two-thirds sold in overseas markets.