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Kandy Wong

Chery Automobile, the Anhui-based maker of the QQ brand cars in China, said it met the sales target for the domestic and overseas markets last year.

The carmaker said sales jumped 61 per cent to 305,236 units during the 12 months, while exports surged 178 per cent to 50,000 units.

Sources said Chery planned to sell shares next year, possibly in both the mainland A-share and the Hong Kong markets, confirming a Xinhua report.

Chery spokesperson Wang Wei declined to comment yesterday.

The carmaker is strengthening marketing and research and development as it prepares for a listing.

In November last year, vice-president Lu Jianhui said Chery needed 30 billion yuan over the next five years for expansion, of which  up to 800 million yuan a year would be used for research and development.

Car sales in the mainland reached the target of seven million units last year.

China Association of Automobile Manufacturers secretary-general Jiang Lei estimated sales could reach eight million units in the country this year, maintaining a 15 per cent growth rate.

The association also expected mainland carmakers, including Chery, to keep their sales growth rate at between 15 per cent and 20 per cent this year.

Chery will announce its 2007 plan later this month.

'Chery is broadening its business such as manufacturing of passenger cars, minivans, sports utility vehicles and car engines,' Fitch Ratings car analyst Matthew Kong said.

'The company obviously shows that it plans to enlarge its market share in China.'

In October last year, Chery signed a memorandum of understanding to supply Italy's Fiat Auto 100,000  petrol engines for vehicles produced both in China and abroad.

For the first half of last year, the firm had a 7.4 per cent market share in China, ranking fourth, according to  association statistics.

'Chery has good strategies for its export business. It started with easier markets such as Iran, Syria and Russia with sales of price-sensitive products. It hopes to build a good foundation before eyeing the United States and European markets,' Mr Kong said.

The company's plan to tap the  US and European markets was marked by the signing last week of a deal  to make small cars for DaimlerChrysler's Chrysler Group for global sales.

Despite healthy growth in the mainland car industry, some domestic players failed to meet their targets.

Geely Automobile has previously indicated its 2006 sales may fall short of the 180,000-unit target.



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