Chinese automakers pursue pickup market

BEIJING -- Pickup trucks are largely neglected by Chinese automakers, but that is changing.

Demand for pickups is high in Southeast Asia, Australia and North America, and automakers in China want a share of the market. In Asia and Australia, their main competitors are the Japanese.

Chery Automobile Co. unveiled its Higgo2 pickup at the Beijing auto show. The 1.9- liter diesel pickup will enter markets "such as Thailand and Australia in late 2009, early 2010," Zhang Lin, general manager of Chery International, said at the show.

Lin says initial export volume is expected to be low.  "I think it's a very competitive market -- with a strong product offering from our Japanese competitors."

In 2007, 428,395 pickups were sold in Thailand, and in Australia 152,538 pickups were sold last year, according to Automotive Resources Asia, a unit of J.D. Power and Associates.

Chery will have to consider competition from other emerging Asian automakers.

Tata Motors  just launched a small pickup, the Tata Xenon, at the Bangkok Auto Show this April. The 2.2-liter diesel common rail pickup sells for under 140,000 yuan ($19,957).

Dandong Huanghai Automobile Co. invested 1.2 billion yuan ($171.6 million) in a new plant to produce pickups and SUVs, says Xie Jun, deputy general manager of Dandong's overseas department.

"Expect a lot of sales to North Korea," Xie said at the Beijing show.

Dandong already has an assembly line in North Korea.

Government restrictions are getting tighter on passenger vehicles in China with stricter emission and safety regulations. However, pickups are classed as commercial vehicles here in China and do not face similar regulations.

"Very easy to get a commercial vehicle license in China," says Xie.

Chery bought an underused commercial vehicle plant from China FAW Group Corp. a few years ago. The plant, based in Wuhu, has been completely gutted, says Zhang, and now has a capacity to produce 100,000 vehicles annually.