Changan Auto slows N. American market entry

Changan Automobile Group, China's No. 3 automaker, said on Monday it had slowed down plans to set up a Mexican plant but remained committed to breaking into the North American market.

"We are still doing market research there. There won't be any big investment for the time being," Zhu Huarong, head of Changan's research and development division, told Reuters.

"We have slowed down the pace of the plant a bit because of the financial crisis, but our plan is unchanged," Zhu said in an interview.

The company said the Mexico plan would secure a foothold to North America.

Changan, a Ford Motor China partner, signed a deal last year to set up in Mexico.

Changan is among a growing group of Chinese automakers, including its top player SAIC Motor Corp, hoping to emulate the global success of Japanese carmakers like Toyota Motor.

SAIC, which bought MG Rover's 10,000-unit Longbridge plant in Britain in 2007, wants to start making its MG 6 sedan in the UK, its president Chen Hong told reporters on Sunday.

GOING HIGHER END

Chinese automakers are mostly focused on the lower end of the domestic market, leaving the lucrative higher end to foreign brands, such as General Motors GM.UL and Volkswagen.

But as wealth grows in what is now the world's top auto market, many Chinese manufacturers are looking to boost their patriotic profile tby offering higher-end models.

Chery Automobile, whose QQ sells for as little as 30,000 yuan ($4,394), unveiled its first premier car G6 under the Riich brand in April, followed by G5 six months later.

Changan, which currently makes small cars, such as Yuexiang and BenBen, is also working hard to tap the upper end of the market, Zhu said.

"We have been investing heavily in research and development. We will not stay at the lower end forever. If fact, you can see our first self-made saloon within months," he said, declining to provide further details.

When asked why Changan did not acquire western brands to raise its own profile like some of its peers, Zhu said: "We had some initial contacts with some foreign brands but decided to give up in the end."