East China's Fujian Province is set to energize the development of its automobile industry, aiming to build an automobile manufacturing base on the west coast of the Taiwan Straits.

Fujian plans to reach an annual output of 500,000 vehicles by 2010, in an attempt to capture more than 5 per cent of the market, said Lin Yuzhang, chairman of both Fujian Motor Industry Group Company and Southeast (Fujian) Motor Co Ltd (SEM).

By 2010, three industrial centres are expected to take shape in the middle, south and northwest of the province, Lin said.

Making Fujian an automobile manufacturing base was first broached at the annual session of the provincial people's congress held in January.

Fujian Governor Huang Xiaojing told the congress that, to reach the goal, the province will enhance its co-operation with Taiwanese and multinational automobile firms and strengthen automobile enterprises such as SEM, King Long United Automotive Industry Co Ltd and Fuyao Glass Industry Group Co Ltd.

In 2004, Fujian produced 120,000 vehicles and refit a further 30,000, ranking it 12th in the country.

"Fujian's motor industry has entered a significant development phase," said Lin.

He told China Daily that the province's co-operation with Taiwan has been a major driver of the rapid development of Fujian's motor industry over the past decade.

As the largest Taiwan-funded automobile enterprise in the mainland, SEM currently has an annual production capacity of 150,000 vehicles, with a soaring sales volume growth of 63 per cent each year on average. The company will soon launch its third and fourth stages of construction, which will increase the plant's capacity to 300,000 vehicles a year.

At the end of last year, the firm sealed a deal with DaimlerChrysler worth 188 million euros (US$245.67 million) to produce Benz commercial passenger vans.

"This is the first project between a Fujian-Taiwan joint-venture auto maker and an international auto giant, to create a new manufacturing base of Benz commercial vans in the Asia-Pacific region," said Lin.

The project now is under construction in Fuzhou, capital of the province, and will become operational in December. It is expected to see an output value of 20 billion yuan (US$2.4 billion) by 2010.

(China Daily March 15, 2005)