China's automakers move a step closer to challenging in Europe

Paul McVeigh is managing editor at Automotive News Europe.Paul McVeigh is managing editor at Automotive News Europe.
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The day when China's automakers become serious challengers in Europe's car market is getting closer, as some new developments show.

Italian car dealer Massimo di Risio plans to assemble cars shipped from China's Chery Automobile in a factory in Sicily that Fiat closed on Nov. 24.

In Bulgaria, Great Wall Motor has started test production in a new plant that's scheduled to start full production of three models early next year for sale locally and in other European markets.

And in China, Chery Quantum, a joint venture of Chery and Better Place stakeholder Israel Corp., is sharpening plans to ship compact cars and an SUV to Europe to be sold under a new brand called Qoros.

Chery Quantum's plans are perhaps the most interesting because the company is relying heavily on Western expertise and is targeting half of its long-term projected annual production of 300,000 units at Europe.

Vice chairman Volker Steinwascher, a former head of Volkswagen's North America region, had the initial idea to use his industry contacts to establish Chery Quantum. He has recruited a number of German executives, including the former designer for BMW's Mini brand, Gert Hildebrand, to join the project.

Steinwascher says Chery Quantum is developing cars that meet Western standards for quality, safety and fuel economy without help from Western companies. That means it will retain technology patents and expertise to use as it sees fit in the future.

Austria's Magna Steyr has done most of the development for the first prototypes and AVL, also from Austria, is developing engines.

Steinwascher says the company won't try and rival the driving dynamics and technology of Western rivals. Its cars will have technology that's easy to use and they will be affordable, priced between 11,000 euros and 15,000 euros.

Chery Quantum aims to start exporting in 2013. By that time Great Wall's factory in Bulgaria will be up and running and di Risio's factory in Sicily may be exporting rebadged Chery models outside Italy.

China's SAIC Motor Corp., which builds the MG6 compact sedan at MG Motor's factory in Longbridge, England, also has big expansion plans for Europe.

All this means there will be even more competition in a weak European market that's likely to get even weaker as austerity measures hit buyers' spending power.

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