CHINA WANTS TO BE A TOP WORLD CAR MAKER =
A PLAN TO BUY A PLANT IN BRAZIL AND TRANSFER IT PIECE BY PIECE = DAIMLER-CHRYSLER = BMW ==
Abstract by ELVIO ARMANDO TUOTO
The Lifan Group, a major Chinese company, supported by the Communist Party, is bidding to buy from DaimlerChrysler and BMW, a car
engine plant in Brazil and intends to rebuild it piece by piece in China.
If the purchase succeeds - and it is early in the process - China could leapfrog competitors like South Korea to catch up with Japan, Germany and the United States in selling some of the most fuel-efficient yet comfortable cars on the market.
The engine plant is one of the most famous and unusual in the auto industry. Built in southern Brazil in the late 1990's at a cost of $500 million by a 50-50 joint venture of Chrysler and BMW, the
factory combines the latest American and German technology to produce the 1.6-liter, 16-valve Tritec engine. This engine is one of the most technologically sophisticated and fuel-efficient car
engines in the world
Lifan says it is the sole bidder for the factory and wants to start producing engines in 2008. The bold moves are being driven by one of China's remarkable entrepreneurs: Yin Mingshan, president and principal owner of Lifan, Mr. Yin has his sights on exporting to Europe in 2008 and the American market in 2009.
Any attempt to buy a comparable factory in the United States might be blocked, but Brazil do not have comparable restrictions on the export of high technology.
Lifan, already one of the world's largest motorcycle manufacturers with sales in 112 countries, is about to start exporting its remarkably well-built, $9,700 midsize sedans to developing countries in Asia, the Mideast and the Caribbean. But several more years of
work is needed before the company is ready to compete in industrialized countries.
Chrysler and BMW began construction of the Brazilian factory in April 1998, a month before Daimler-Benz began a takeover of Chrysler that it completed in November of that year. Heralded in the automotive press at the time as arguably the most advanced engine factory ever built, the factory had already become a corporate orphan by the time production began in September, 1999.
The Brazilian auto market had entered a slump by then and Daimler already had ample engine manufacturing capacity of its own and was uncomfortable collaborating with its longtime German rival, BMW.
BMW installs its half of the engines from the factory in its award-winning Mini Coopers. But it has already announced that future engines for these cars will come from a factory in France.
Chrysler used to put the Brazilian-made engines in its Neon compact cars and the PT Cruiser. But it is now selling its half of the engines to Lifan and to Chery Automotive and a Chinese joint venture by Mazda.
Mr. Yin has no doubts that China can also compete with the United States and remarks that Americans work 5 days a week while the Chinese work 7 days. He also emphasizes that Americans work 8 hours a day, and the Chinese work 16 hours.
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