China to release new car brands into Australia

Australia's car sector is poised for a flood of investment as well as new retail car brands from China, as the world's biggest car market and maker in-waiting seeks better technology and fresh markets.

China's largest independent carmaker and biggest retail brand, Chery, is considering investments in Australia and is looking at distressed component makers in the sector.

In March, Chinese carmaker Geely paid US$40 million for the world's second-largest auto-transmission supplier, Melbourne-based Drive Train Systems International.

"The Geely purchase was a breakthrough. It's a full-blown plant with serious research and development," Industry Minister Kim Carr said in China yesterday.

Chery, which has a small research operation in Sydney, is also planning to enter the Australian retail car market with several models of its latest ranges, making it the first passenger car manufacturer from China to sell cars in Australia.

Earlier this year a smaller Chinese carmaker, Great Wall, brought its small-truck range to Australia -- there are now 55 different carmakers selling vehicles in Australia.

Chery president Yin Tonyao said he hoped to enter the Australian market this year, one of 70 the company was either in or planning to begin sales in.

"Last year we made 356,000 cars and this year we are planning to make 500,000," he said.

Unlike China's top-four carmakers Chery does not have any manufacturing joint ventures with offshore carmakers, only creating vehicles under its own brand.

"We are concentrating on small vehicles," Mr Yin said.

Late last year the company launched its first hybrid model and next year plans to release its first fully electric car.

Trade Minister Simon Crean and Mr Carr, who are on a week-long tour of Chinese carmakers, also visited the operations of Chery's Australian joint-venture partner, Futuris, which also has local government investment to witness its seat-making operations.

Futuris began construction on its plant in 2006 and this week turned out its 100,000th pair of seats, It is one of 11 Australian component makers operating in China. It recently inked a new deal with truck and large passenger-vehicle maker JAC for a fresh contract.