The Hindu Business Line : China's Chery eyeing Indian compact car market

After the Japanese and the Germans, it is the Chinese now who are working out a strategy to get a piece of the fast growing domestic automobile market.

China's Chery Automobile Co is learnt to have entered into talks with a North India based automotive group to introduce its fast selling compact car, QQ in India. According to industry sources, talks are on for establishing a joint venture in partnership with the Indian firm. Sources added that initial estimates worked out have suggested that QQ when launched in India would be priced in the region of Rs 2.5 lakh - Rs 3 lakh. QQ in China comes with two engine options, 0.8 litre and 1.1 litre.

Chery Automobile, which had sales volume of 189,100 cars in 2005, recently settled a high-profile lawsuit filed by General Motors, which claimed that Chery's QQ small car was a copy of the Chevrolet Spark. Incidentally, the Chinese carmaker is currently in discussions to build a small car for DaimlerChrysler and earlier this year formed a manufacturing partnership with Fiat Auto.

It is also forming a joint venture with Argentine firm Grupo Socma to assemble the QQ compact cars for South America's Mercosur auto market.

A number of foreign automobile companies have in recent months announced expansion plans for the Indian market.

German automakers Volkswagen and BMW are in the process of establishing manufacturing operations in India, while DaimlerChrysler recently confirmed that it would set up a second plant in the country. Japanese carmakers Honda and Toyota are expected to make announcements on their second plants in India soon, while Nissan is likely to leverage on the M&M-Renault partnership to launch its products in India.

Indian companies International Cars Ltd and Hero Honda too have indicated plans to enter the passenger car market in partnership with a foreign player.

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