CHONGQING -- Ever walked into a car showroom and asked for a Doodoo? If Yin Mingshan has his way, thousands of Chinese will do just that.
Unhappy with tiny profits and fierce competition in the two-wheel industry, China's motorcycle mogul is gearing up to roll out his first cars. Yin is hitching a ride on the red-hot sector with a plan to list in Hong Kong or on the mainland later this year to raise between 300 million and 400 million yuan.
Privately owned LiFan Group, China's top motorcycle maker, has invested $100 million in a car plant in southwestern China and expects to produce its first sedan by the end of the year , Chairman Yin said in an interview.
"We want to call the first sedan 'Doodoo' because it sounds like the noise car horns make," Yin, 66, said with a chuckle.
"The name sounds round and fat, like Audi, and works for the Chinese market. Cars with names that sound thin and hard don't do as well," said Yin, sporting a black Gucci jacket and clunky glasses like those favoured by former President Jiang Zemin.
LiFan joins dozens of domestic and foreign car makers drawn by China's booming economy and rising living standards. They have poured billions of dollars into making everything from cheap compact cars to leather-lined luxury sedans.
But many analysts say automakers are building too much capacity too quickly, causing some players to cut prices as they for fight market share. Beijing is also keen to encourage consolidation in the fragmented sector of 120 auto makers.
The Doodoo would be followed by a second model called "Didi" and a third called "JoyJoy", possibly in 2005. The plan is to crank out a 10,000 to 20,000 sedans in 2005 and rev up production to 100,000 cars within five years, Yin said.
Yin, who survived the tumultuous Cultural Revolution as a factory hand and is now one of China's richest men, will have to fight global giants such as PSA Peugeot Citroen, Volkswagen AG, General Motors Corp and Toyota Motor Corp, who control over half the market.
"There will definitely be a price war. It's the first rule of economics," he said. "But buyers will benefit. Just think about the days when color TVs were a luxury. Now an average Chinese family has two, even three TVs."
Yin said it was natural for LiFan to expand into car making, just as he went from factory gofer to book editor and businessman with his own soccer team.
"My role model is Honda," he said. "It's a motorcycle maker turned carmaker, with car sales 10 times that of motorcycle sales."
LiFan, a sprawling group headquartered in the western city of Chongqing, had sales of 4.58 billion yuan ($553 million) last year with exports of $200 million mostly to the Middle East, Africa and Southeast Asia.
Yin said 2004 sales would exceed five billion yuan, with net profit around five percent of sales. Like Honda, the firm wants to expand into developed countries such as the United States.
"One who earns money in China is a winner, one who earns money overseas is a hero," said one slogan written in bold red letters on a LiFan building.
Making cars is much more profitable than producing motorcycles, which have razor thin profit margins between two and five percent, Yin said.
That's because the motorcycle market is crowded: More than 100 companies, including heavyweights Jialing Industrial Co. Ltd. and Qianjiang Motor, churn out some 15 million motorcycles a year, making China the world's top maker.
Thousands of motorcycle brands clog mainland streets and rural dirt roads, a throwback to the days when they were the best transportation people could afford.
Yale Zhang, a Beijing-based analyst for Automotive Resources Asia, said it was wise to diversify because some cities, such as Guangzhou, are planning to ban motorcycles altogether.
"The car industry is growing very fast and profit margins are still very high," he said.
Car sales in China nearly doubled in 2003 to around two million vehicles, and double-digit growth is expected this year.