Further recognizing the potential of the emerging market, foreign automakers spearheading their global strategies into frontier areas are focusing on economy cars to meet the needs of the country's 300 million households.

The American General Motors Corp (GM) and the Japanese Toyota Motor Corp are gearing up their efforts as the Chinese Government has begun planning for the motor sector for the 2001-05 period and beyond.

With about 30 component plants already in China, Toyota is waiting for the Chinese Government's approval to complete its process of building economy cars.

Toyota and its Chinese partner have submitted the government proposals for manufacturing economy cars, said Fujio Cho, Toyota's president, in Beijing.

The cars would have 1.0-litre and 1.5-litre engines, and the product is a niche in the country.

Cho was in China for the Fortune Global Forum held in Shanghai and Beijing.

Toyota and its Chinese partner are busy doing feasibility studies, Cho said.

Cho did not identify Toyota's Chinese partner, but said he had talked with Chinese officials in Tianjin about the expected auto-making joint venture.

The Tianjin Automotive Industry Corp manufactures 1.0-litre and 1.3-litre Charade cars with licensed technology from Daihatsu, a member of Toyota Group.

Once the approval for Toyota is made, it will signal that the country has begun implementing the strategy shift from business cars to cars affordable to ordinary Chinese.

GM, the world's largest automaker, is ready to manufacture economy cars with the latest technology, said Lawrence Zahner, president of GM China Operations.

China has permitted foreign direct investment in maVnufacturing cars above the 1.6-litre size, mainly for government departments and businesses.

Surveys show more Chinese afford economy cars. Economy cars that carry the latest technology and have a nice design will be the centerpiece of China's 10th Five-Year Plan (2001-05).

GM, with brand-new car designs such as Qilin, developed by the Pan Asia Technical Automotive Centre, are stepping up campaigns to win approval from the Chinese Government as market demand for economy cars rises.

Zahner said any automobiles GM builds in China next to Buick cars will be family cars. GM is building 2.9-litre Buick cars in a US$1.5-billion joint venture with Shanghai.

In a group interview, Zahner said GM expects to participate in manufacturing cars in full range for all market segments in China.

Shirley Young, GM's vice-president, said she believed China can skip many phases and jump onto an advanced stage by incorporating new technology. GM will help with that.

(China Daily 10/01/1999)