China Auto News of the Week (July 21 - July 25, 2008)

Great Wall banned from exporting GWPeri minicar

A Turin court ruled this week that a Chinese minicar built by independent automaker Great Wall won't be allowed into Europe.

The court said the GWPeri minicar is too similar to the Fiat Panda.

Fiat sued Great Wall both in Italy and in China. Those moves were aimed at keeping the GWPeri out of the European Union and out of China. Fiat alleged that the car was a clone of its Panda minicar.

On July 16, a Turin court accepted Fiat's claims, saying in its ruling "the (GWPeri) doesn't look like a different car but is a (Fiat) Panda with a different front end."

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Hongtu to provide engine brackets for Chrysler

Shanghai, July 21 (Gasgoo.com) Guangdong Hongtu Tech. (Holdings) Co., Ltd. , a Chinese manufacturer of precision aluminium alloy die casting parts, announced last week that it has recently signed a contract with a Canada-based company, Vikeda Industries Inc., to supply auto engine brackets for Chrysler LLC, an American auto-maker, reported Shanghai Securities News today.

The contract is valued at a total of US$27,380,403 and with a valid period of three years from January 1, 2008 to December 31, 2010. The contract value will be paid in three years: $4,256,461.9 in 2008, $11,197,812 in 2009, and $11,926,129.1 in 2010.

Dongfeng Volvo talks suspended due to policy barriers

Shanghai, July 21 (Gasgoo.com) Talks between Volvo Group and Dongfeng Motor Corp have been suspended again as a result of policy barriers, source from Dongfeng Motor Co told China Business News today.

The newspaper cited a senior executive from Dongfeng Motor Co as saying the company's plan to form a joint venture with Volvo was suspended as a divergence of Nissan's role in the project.

According to Chinese regulations, foreign investors should not take more than 50% stakes in their ventures with domestic companies and the number of their ventures in the country is strictly limited.

There is a 50:50 venture between Dongfeng and Nissan. If Dongfeng is to form a joint venture through its subsidiary Dongfeng Commercial Vehicle Co, Nissan will have to transfer its stakes in the commercial vehicle subsidiary to make the deal go ahead, a case Nissan is not expected to follow.

China weighing if to appeal against WTO ruling

Shanghai, July 21 (Gasgoo.com) – After the World Trade Organization issued on July 18 a formal ruling against China in the auto parts dispute with the U. S., EU and Canada, the industry and legal experts in the country insist that the ruling is unfair and suggest that the government prepare for an appeal.

"The ruling is unjust," said Mr. Zhou Shijian, standing director of China Society for WTO Studies. "The measures China has used concerning the imported cars could never be ‘discriminatory treatment of foreign auto parts’; the market is open for imported auto components." Zhou has several years of experience in dealing with trade disputes. He added that India -- also a WTO member -- levies even higher tariffs against imported cars and components but hasn't incurred such pressure as China has. 

Zhongxing Auto mulls building American JV

Shanghai, July 23 (Gasgoo.com) Chinese automaker Hebei Zhongxing Automobile Co. has found a new partner after cutting the cooperation with its former American partner Chamco Auto, which is involved with lawsuits, reports Nanfang Metropolis News.
  
Zhongxing’s plan for the North American market will not be disrupted by the cooperation halt with Chamco, but will be postponed as preparations need restarting, the company officials said. 

Zhongxing Auto in talks with GM, FAW for co-op

China's Hebei Zhongxing Automobile Co is in talks with General Motors and major Chinese automaker FAW Group to explore opportunities for cooperation, including equity ties, a source close to the situation said on Thursday.

"Consolidation is inevitable in the Chinese auto market, which now has more than 100 players, and a company of Zhongxing's size makes a good takeover target or joint venture partner," the source told Reuters.

"Zhongxing is holding talks with several potential partners including FAW and GM to seek cooperative opportunities, including possible equity ties, but nothing has been decided at the moment," the source added.

China H1 auto exports up 62% to 358,000 units

Shanghai, July 25 (Gasgoo.com) Boosting the strong export momentum of 2007, Chinese automakers exported a total of 358,000 vehicles in the first half of 2008, up 62% year on year (y/y), reported Southern Daily today, citing the latest data from China Association of Automobile Manufacturers.

Of the auto exports from January to June, there were 200,600 passenger vehicles, up 83.37% y/y, and 157,400 commercial vehicles, up 41.04% y/y. Most of these vehicles were exported by China's independent carmakers and are China's own-brand cars.

Great Wall Motor appeals against Fiat ruling

Shanghai, July 25 (Gasgoo.com) Chinese carmaker Great Wall Motor Co has already issued an appeal against an Italian court ruling that bars it from selling a compact car in the European Union because it too closely resembles Fiat's Panda, a Great Wall official told Chinese media on Thursday.

"We are expecting a just and reasonable judgment this time," Great Wall spokesman Shang Yugui told Shanghai Securities Journal. He said it's incomprehensible that the Turin court ruling starkly contradicts car experts' conclusion.

Shang explained that the Turin court had hired a group of car experts to investigate into the case in advance, and the experts concluded that Great Wall's Peri has its own feature and doesn't violate the property rights of Fiat's Panda. The Turin court, however, ruled on July 16 that "the Peri is a (Fiat) Panda with a different front end."