China's SAIC on the fast track to building a brand

China's biggest automaker announced Monday that it's injecting another $1.25 billion into its drive to export SAIC-brand vehicles worldwide. Monday's announcement follows February's news that the company had established a $460 million unit to build SAIC cars based on the Rover 25 and 75 models.

SAIC's new investment will fund five lines to build 30 new models by 2010, more than doubling the automaker's production in the process. By 2010, SAIC plans to sell over 200,000 of its own cars, including 45,000 sold overseas.

SAIC has faithfully followed the path established by many other Chinese technology-based enterprises, partnering with leading foreign companies in its domestic market to acquire competitive technologies, and buying intellectual property to jumpstart its own brands. A key partner in this process has been the Chinese government, which has mandated a minimum 50 percent Chinese ownership of any automotive venture established in China by foreign companies. Meanwhile, carefully crafted import tariffs have helped grow China's domestic auto parts manufacturers.

Now that the industrial infrastructure is in place, SAIC and other Chinese automakers are ready to take their show on the road. Just like their Japanese and Korean predecessors, they appear destined to become a permanent feature in the global automotive marketplace.

[Source: Reuters, Boston Herald]

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