Production of the 2.0 litre Zhonghua will begin at the end of August at a plant owned by Bavarian Auto Group in Egypt with components and spare parts shipped from China, Lu Qiang, an official at Hong Kong-listed Brilliance, told China Daily yesterday.

Output of the Zhonghua will amount to 2,000 units this year and will rise to 10,000 units next year.

The move makes Brilliance the second Chinese automaker to produce own brand cars overseas, following Chery Automobile.

Chery, a local government-controlled car maker in Anhui Province, started to assemble its cars late last year in Iran with an Iranian partner.

Lu said that Brilliance was also negotiating with companies from Iran, Russia, Viet Nam and Malaysia to assemble its cars in those countries.

"We attach great importance to the cultivation of the overseas market...We have established the systems of choosing overseas agents, overseas sales and services," Brilliance said in a statement yesterday.

"We believe along with the start of the project in Egypt, Zhonghua sedans will be built all over the world in the near future," it said.

Brilliance started direct automobile exports during the third quarter of last year and aims to export 6,500 units this year, up from more than 100 units last year.

It has chosen six exclusive agents in the Middle East and Africa to sell its cars.

"To go overseas is a new strategy for Chinese automakers like Brilliance and Chery as they are too weak to compete with foreign auto giants all round in the domestic market, at least now and in the near future," said Qian Pingfan, an industrial economist at the State Council Development and Research Centre.

"Most of their target overseas markets are not priorities for foreign auto giants," Qian said.

Almost all of world's major automakers have formed joint ventures in China.

More than 80 per cent of China's car market is controlled by brands made by foreign automakers, such as Volkswagen, General Motors, Honda, Hyundai and Toyota.

(China Daily April 15, 2005)