Asia:China's Jiangling hopes for higher Ford stake
Reuters / September 15, 2003
NANCHANG, China (Reuters) -- Jiangling Motors Co. Ltd. -- 29.96 percent owned by Ford Motor Co. -- is aiming to entice the U.S. giant to hike its investment with earnings growth of 87 percent in the first half of the year.
"From what we understand, Ford is considering raising its stake," Zhou Ming, vice general manager of Jiangling Motors, said at a weekend news conference. He declined to elaborate.
"We're going to sell 60,000 vehicles this year, including our flagship pick-ups you see here," Zhou told Reuters separately, over the din of a bustling assembly line at the company's Nanchang factory.
Jiangling Motors was founded and listed in 1993. It wallowed in the red in 1998 and 1999 but reversed losses in 2000 after slashing prices.
Today, the company keeps 15,000 on the payroll and wields assets of 6.5 billion yuan, vying with the likes of truck maker Qingling Motors Co. Ltd. and van maker Brilliance China Automotive in a cut-throat domestic market.
Jiangling Motors moved 51,172 vehicles last year, up 37.2 percent over the previous year, ranging from pick-ups to mini-vans often seen zipping along the dusty streets of Nanchang -- capital of the southeastern province of Jiangxi.
The Shenzhen-listed unit cranks out the pick-ups at a joint venture with Japan's Isuzu Motors Ltd. and Itochu Corp., each of which owns 12.5 percent of the factory in the city's suburbs.
Jiangling appears on track to hit its target.
In the first seven months of 2003, Jiangling's vehicle sales hit 37,295, up 26.07 percent on the same period last year, with revenues hitting 4.30 billion yuan, up 36.28 percent, Zhou told reporters.
"We should have no problem maintaining our first-half earnings growth in the second half, unless there are unforeseen circumstances like SARS," he said.
"If you look at the rate at which China builds roads and expressways, there will be more demand for light trucks, though the growth won't be as fast as cars."
"For the whole of this year, we hope to sell about 12,000 Transits. The rest of the sales will be light trucks and pick-ups," said Zhou.
Jiangling Motors Co Ltd, whose B shares -- open to foreign and Chinese investors --- have risen nearly 40 percent since the start of the year, reported net profit of 243.26 million yuan ($29.38 million) in the first six months.
As foreign and domestic players slug it out in a potentially lucrative car market, in which sales are expected to double to about two million sedans this year, Zhou said the company won't be jumping on the bandwagon in the near term.
"Everybody in the auto business wants to make cars. So we're not ruling out that possibility," Zhou said.
The parent company, Jiangling Group, is diversifying. It set up Jiangling Landwind Motors Co Ltd and began making sport-utility vehicles (SUVs) late last year.
The newly created arm hopes to make about 3,000 SUVs this year, priced from 118,000 yuan to 158,000 yuan.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....