Bike plant to help Leading Spirit's drive
LEADING Spirit (Holdings), which plans to set up a motorcycle assembly factory in Jiangmen, will market the bikes in China under a local brand name.
While the company's traditional core business is trading electrical and electronic components, it recently began trading in motorcycle parts and components.
Chairman Wong Shi-ling said negotiations were under way with a domestic enterprise in Jiangmen, Guangdong, for the joint-venture motorcycle plant.
Leading Spirit will supply all major components, imported primarily from Japan, South Korea and Taiwan.
The factory is expected to begin operations in July, with an estimated output of 30,000 units in its first year.
Mr Wong said the venture complemented and strengthened the group's existing trading in motorcycle components.
Demand for the motorcycles assembled by the proposed factory would fuel demand for the parts and components distributed by the group.
He said: ''This will be an exciting development for the group as it will further broaden the group's product range.
''Given China's robust economic growth, we believe the living standards and the purchasing power of Chinese people will continue to rise and demand for consumer electronic products, electrical appliances and durables such as motorcycles will also grow correspondingly.'' Leading Spirit intends to keep its trading in electrical and electronic-product components, mainly televisions and video players, as the core operation.
The group's air conditioner assembly plant is expected to become operational early next year.
It expects the China market will remain a main market.
And in view of the increasing demand for small consumer electrical appliances in China, Leading Spirit intends to invest directly in two manufacturing plants in Guangdong.
The proposed plan will enable the group to become the sole supplier of all required parts and components and to capture the market directly by distributing finished products through its own sales outlets in the country.
Leading Spirit recently established a Consumer Electrical Products Square in Jiangmen and has proven successful.
It is now planning similar complexes in other cities, including Dongguan, Wuhan, Guangzhou and Beijing.
Mr Wong said: ''China's austerity measures have focused primarily on the property and finance sectors and there are strong signs that the country's economic development is already back in order.
''The consumption power of the Chinese remains strong and our business and product diversification plans will enable Leading Spirit to benefit substantially from the growing prosperity of China.'' Buoyed by favourable market conditions in China, Leading Spirit's believes turnover for the year ending June 30, 1994 will double this year's.
The group also expects profits to rise considerably.