Geely, BAIC target foreign brands
- Source: Ce.cn
- [09:32 September 14 2009]
- Comments
Li Shufu, the billionaire founder of China's biggest private automaker, is leading a push among the country's carmakers for overseas brands to move beyond the world's fastest-growing car market.
Li's Geely Holdings Group Co said last week it might work with Chinese state investment companies to buy Ford Motor Co's Volvo unit.
Beijing Automotive Industry Holdings Co (BAIC) joined a bid for General Motors Co's Saab on Wednesday and Sichuan Tengzhong Heavy Industrial Machinery Co is trying to buy GM's Hummer.
The acquisitions would give Geely and Beijing Auto entry into the US and Europe, where Sweden-based Volvo and Saab have reputations for safety. The Chinese companies would also face the challenge of profitably building cars in relatively small volumes, a feat that eluded GM and Ford.
"It takes decades to establish a recognized, renowned brand," said Jim Hossack, an industry analyst at researcher AutoPacific Inc, in Tustin, California. "China wants to do it much faster, perhaps within as little as five years."
Geely has a target of getting 66 percent of sales from overseas by 2015 compared with 5 percent in the first half. In June, Geely also bought the key assets of bankrupt Australian gearbox maker Drivetrain Systems International to help add larger and more sophisticated models to its product line-up.
"I'm fighting for what's in overseas automakers' rice bowls" instead of their leftovers, Li, 46, said. "I want to build Geely into a global first-tier automaker."
For Beijing Auto, the bid for Saab marks a second attempt to buy a European carmaker. It was rebuffed by GM in July when it bid for the Ruesselsheim, Germany-based Opel unit.
GM decided to dispose of Saab in February as part of a European reorganization. The Swedish unit has been unprofitable for most of the two decades that Detroit-based GM has owned it. Saab sold fewer than 100,000 vehicles worldwide last year.
