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The China First Automobile Works (FAW) Group Corp., one of the country's leading automakers, announced Sunday it will spend 13 billion yuan (about US$ 1.7 billion) in the next eight years to develop its own vehicle brands.

FAW, already a partner with Volkswagen AG, Toyota and Mazda, will not only cooperate with overseas companies, but also continue to develop its own brands, FAW's general manager Zhu Yanfeng said.

In the 1950s, the Changchun-based company produced the "Jiefang" truck, or Liberation truck, China's first indigenous heavyweight vehicle. "The company's latest Jiefang J6 series, which took six years to develop, has met top internationally-recognized standards," Zhu said.

The company sold 690,000 vehicles in the first six months, and it expects to surpass last year's sales of 1.16 million vehicles.

Chinese home-grown auto brands, encouraged by robust sales, are seeking to expand their overseas presence and shed their image as low-grade vehicle producers.

Qin Lihong, vice president of Chery Autos sales arm, said "Many Chinese auto brands, including Chery, are upgrading their products and vigorously seeking to expand their presence in European countries and other developed nations."

Speaking at the Fifth China Changchun International Automobile Fair that opened Friday in Changchun, capital of northeast China's Jilin Province, Qin said Chery's vehicles have proven competitive in southwest Asia, the Middle East and North African countries, and the company plans to seek bigger markets in North America and Europe.

Early this month, the 10-year-old Chinese auto company in Wuhu, eastern Anhui Province, inked a deal with Chrysler Group to export the first Chinese-made cars to the United States.

Chery announced this week that its exports quadrupled in the first half of the year, with overseas sales likely to top 100,000 vehicles for the whole year.

The company, which holds a 7.2 percent share of the domestic market, has sold cars to 50 countries, with Russia, Iran, Egypt, Indonesia and Argentina its major markets overseas.

At the Changchun fair, Chery debuted the Riich 2, its third new vehicle this year, showing its determination to ramp up sales in both domestic and overseas markets.

Also at the fair, another ambitious Chinese automaker Geely unveiled its first medium-level family sedans equipped with self-developed engines.

Geely's vice president Wang Ziliang said "Geely is trying to change its image as a cheap, low-grade auto producer. It is taking established international auto brands as a benchmark, and trying to compete with them globally."

Figures from the China Association of Automobile Manufacturers (CAAM) show China's auto industry maintained strong momentum in the first half of the year, with both vehicle output and sales rising more than 20 percent.

In the first six months, the companies produced 4.46 million vehicles and sold 4.37 million of them worldwide. Industry analysts say both output and sales are expected to hit a record 8.5 million this year.

CAAM president Hu Maoyuan said Chinese indigenous auto brands have entered a crucial phase where they have the opportunity to become strong businesses and global producers.

Other Chinese auto makers, including Zhongxing, Jianghuai and Lifan said they are revamping their strategy, and investing heavily in developing higher-grade vehicles.

"By taking over foreign companies that have a strong research and development culture, or cooperating with partners, Chinese auto brands will improve their technology and development capabilities," said Xiao Guopu, vice president of the Shanghai Automotive Industrial Corp. (SAIC).

But the international market is far from easy, Xiao added. "Chinese automakers still face a lot of handicaps, including undersized sales network and a lack of talented people able to work in the international market," he said.

Last year, China became the world's second largest market for new vehicles after the United States, with an output of 7.28 million and sales of 7.22 million.

(Xinhua News Agency July 16 2007)