China wants to boost relations with Brazilian automotive industry

12 May 2006

Sao Paulo, Brazil, 12 May – China wants to boost its trade with Brazil’s automotive and spare parts industries, the director of the Chinese Ministry of Trade told Macauhub Thursday.

Zhang Ji said, during a seminar in Sao Paulo, that the industries of both countries were “complementary” and that there was great potential for boosting bilateral relation in the sector.

“Intensifying relations is a good option, even in an extremely competitive market such as that of production and sale of vehicles and spare parts,” Zhang said.

Zhang is heading a delegation of over 100 representatives of Chinese automotive companies, currently in Brazil to assess business and investment opportunities.

Zhang said that, last year, China produced 5.708 million cars, an increase of 12.6 percent as compared to the number produced in 2004.

Currently, China’s total fleet is of 30 million vehicles, which are the result of production by 145 assembly plants set up in the country, 55 of which are for building buses.

“The world’s biggest assembly plants are in China, through joint ventures, and have posted significant profits, that have been much higher than expected,” said Zhang, highlighting the fact that the country is the world’s fourth largest vehicle manufacturer.

Zhang also said that, since January 2005, there have been no restrictions imposed on importing vehicles and spare parts into China.

“We are continually opening up our market to the installation of new assembly plants, which no longer need to create joint ventures with local partners,” he explained.

The Chinese mission to Brazil is made up of companies such as Chery Automobile, Shaoguan Southeast Bearing CO, Guandong Province Shaoguan Foundry and Forcin Group and Chongqing Lifan Industry, amongst others.

Lei Senlin, the representative of Hubei Tri-Ring Motor Streering, said that Brazil, which is currently the world’s 11th largest vehicle manufacturer, has attracted Chinese attention due to its size.

Hubei Tri-Ring Motor Steering was set up 30 years ago to produce spare parts and in 2005 the company posted turnover of US$2 billion. The company is planning to boost its relationship with Brazilian manufacturers.

The secretary of International Relations for the state of Sao Paulo, Flávio Mussa, told the Chinese business people that Brazil currently uses technology at the forefront of the sector.

“We produce “flex fuel” engines, which use any type of ethanol or gasoline and that may contribute to reducing atmospheric pollution in China’s big cities,” he said

The business mission took part in a round of business meetings with Brazilian business people promoted by the Brazil-China Chamber of Economic Development (CBCDE), set up in June 2001.

The president of CBCDE, Paul Liu, said that the round of business meetings was an “opportunity for Chinese business people to get to know Brazilian companies, with the aim of widening relations.”

The Chinese business people will also take part in AutoSports, one of the main international spare parts fairs, which will run from May 13 in Sao Paulo.

With one of the largest fleets of vehicles on the road in the world, Brazil has around 23 million vehicles including cars, light commercial vehicles, trucks and buses.

The business mission is taking place at a time when the Brazilian automotive industry is increasing its imports of spare parts from China.

This increase is due to the recent increased value of Brazil’s currency against the dollar, which makes importing Chinese parts cheaper than producing them in Brazil.

Last year, Chinese sector exports to Brazil totaled US$2.759 billion, an increase of 56 percent on the previous year.

In the same year China imported US$362 million’s worth of automotive goods, which represented a year on year increase of 30 percent.

“We hope that more Chinese companies from the sector will increase exports to Brazil and will also look at the possibility of investing in Brazil in order to help solve the problem of unemployment within the local population,” said the Chinese consulate-general in Sao Paulo.

Lia Jiao Yun said he believed that in the future there would be more Brazilian products on the Chinese market as a way of balancing out trade between the two countries. (macauhub)

MACAUHUB FRENCH