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Carrie Lee

JARDINE International Motor Holdings does not expect to be crushed under the wheels of the Government crackdown on car ownership.

  The group, which distributes Mercedes-Benz in Hong Kong, Macau and southern China, is an indirect subsidiary of Jardine Matheson Holdings.

  Zung Fu Co, which oversees the group's business in Hong Kong and Macau, said the Government crackdown targeted lower-priced cars.

  'Its effect on us will be relatively small,' said Zung Fu Co director of sales and marketing Michael Lee.

  Zung Fu chief executive officer Richard Lee said the group was prepared for proposed Government changes which could see first registration tax and annual licensing fees increase by more than 40 per cent.

  The group was undergoing its own reform programme, aimed at boosting efficiency in the face of market changes, including added pressure on car owners.

  'When we planned it [the programme], we expected the Government to launch such measures,' said Mr Richard Lee.

  The company's reforms involve changes in the organisation, human resources distribution and business base, such as the introduction of a computer system for sending information to potential buyers.

  He said the proposed government measures would prompt industry players to revise strategies in retail, operation and product selection to suit the changes.

  He admitted that in the long term such a car ownership discouragement programme could hit the industry.

  But he said relieved traffic conditions would make driving easier and could fuel new car purchases.

  The company expects a 20 to 30 per cent sales growth in Hong Kong this year. Last year, it sold 3,000 vehicles in the territory.

  It is also expanding its sales in medium-sized and small cars with targeted equal shares in the sales volume of small, medium and large cars.

  Large cars account for 50 per cent of its total sales in Hong Kong.

  Mr Richard Lee, who is joint managing director of Jardine International Motor, said the group expected its China sales to drop significantly this year under the country's tax policy on foreign cars.

 In comparison, sales last year were extremely good because people rushed to buy cars at the end of the year after getting wind of the news there would be import tax this year, he said.

  The group sold 3,000 cars last year, 800 of which were delivered in December, he said.

  'This year, I would see quite a significant decline from that level unless in the next 45 days the Government relaxes its control.'   Sales fluctuated in the past three months as the market continued to develop, he said.

  However, he added, the group's business grew in Hong Kong and other parts of the world offsetting the China dip.

  The group did not present itself as a Jardine company and did not have trouble with the Chinese.

  The group is responsible for the distribution of Mercedes-Benz products in eight provinces south of the Yangtze River.

  'It is a huge market and a high-potential market with a lot of spending power,' he said.

  The group aims to build a strong sales base on the mainland, and plans to have six joint venture workshops in southern China by the end of the month.



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