Anhui's carmaker is planning to increase overseas sales as it's domestic market continues to slow.
Anhui Jianghua Automobile Group Co. has announced its plan to more than double its sales in the emerging Brazilian market, which will include construction of a 3.8 billion yuan ($600 million) factory in Brazil's Bahia state next year.
The factory will help cut production costs and satisfy the robust market demand for cost-efficient cars. Michael Yang, project director at JAC motors, a unit of the group, forecasts a sizeable hike in vehicle sales from 37,000 in 2010 to 100,000 by 2015.
Many Chinese automakers, such as Chery Automobile Co., Great Wall Motor Co. and BYD Co. are seeking to expand into overseas markets, in particular Brazil, as the domestic demand continues to contract. Sales growth projections from this year have already been re-evaluated several times with the current figure as low as 3% for 2011, down from last years enormous 32% growth. Some have fared worse than others, such as car and truck sectors, which have seen a 1.1% sales drop in October.
Brazil, the world's fifth largest car market, is expected to see a 3.6% in its economy next year. Local production is becoming increasingly important for Chinese automakers, as new policies will see import tax on vehicles rise by as much as 28% in an effort by the Brazilian government to force foreign automakers to build key components locally.