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Chinese firm to export autos to Mexico in '07

June 14, 2007|From Reuters

MEXICO CITY — A Chinese automaker will begin exporting pickup trucks and sport utility vehicles to Mexico this year as a springboard to break into the U.S. market, its U.S. partner in the venture said.

The SUVs will sell for a little more than $12,000 in Mexico and will be the first Chinese vehicles to sell in U.S. showrooms, said Bill Pollack, chairman of New Jersey-based China America Cooperative Automotive Inc., or Chamco.

Pollack said he brokered a deal that would enable China's Zhongxing Automobile to export 50,000 vehicles duty free to Mexico and build a plant in Tijuana to assemble models for export to the United States.

They will be similar to popular models made by companies in the U.S. and elsewhere and will be cheaper, he said.

"Our plan is to average 20% below comparably equipped brand-name competitors," Pollack told Reuters.

China's domestic car industry is heating up and is looking to break into the lucrative North American market.

Assembling the Zhongxing vehicles in Tijuana will make them Mexican under North American free trade rules, so they can be exported to the U.S. duty free, Pollack said.

Zhongxing is among a handful of upstart Chinese automakers, including Great Wall Motor Co., Geely Automobile Holdings Ltd. and Chery Automobile.

Chamco, Zhongxing's exclusive dealer in North America, expects to sell as many as 20,000 vehicles in Mexico in its first year and have the Tijuana plant supplying U.S. motorists within two years.

Mexico is already a major auto manufacturer.

Nissan Motor Co., Ford Motor Co., Volkswagen and other big names exporting a combined 1.5 million cars and trucks from Mexico last year, mostly to the United States.

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