As Shanghai's International Circuit gears up for a weekend of F1 drama, a company in the city has unveiled the first China-made open wheeled racing car available to the country's motoring enthusiasts.

The "Formula 2000" car, produced by Vesta Motorsports Engineering (VME) in Shanghai's Qingpu District, is the first racing car made in China to clock a top speed of 280 kilometers per hour.

"Apart from the engine and the gearbox, we designed and built the car completely in China," says Michael Lee, one of the company's founders.

Two Chinese nationals, Lee and Michael Kwan, together with their American partner Brian Utt, founded the company more than a year ago in a 1,600-square-meter industrial unit. The first car will roll off their production line this month.

"The motorsport market in China is not yet fully developed but there are more and more young Chinese middle-class people who want to race and they are eager to own a racing car," says Utt, a 40-year-old car designer and engineer who has been working in the motorsport industry for nearly 20 years.

The first Formula 1 event in Shanghai last year raised Chinese interest in amateur and semi-professional car racing, and with per capita income steadily rising, amateur racing is now within reach for an increasing number of petrol-heads.

At the moment there are only two racing competitions in China Formula Campus and Formula Renault both organized by a private company based in Hong Kong with racing tracks in Shanghai, Beijing and Zhuhai. There are just six races a year and cars have to be imported from France.

But the 100 percent import duty levied on the cars as they enter the country makes them prohibitively expensive. "To be a member of these racing clubs costs nearly 1 million yuan (US$123,300) per year," explains Michael Lee. It is a huge figure especially when you consider that members do not even buy the cars but can only rent them.

Because the cars Lee makes are produced in China, they do not carry the heavy tax burden and retail at much lower prices.

"We compete in price," says Lee. "We offer the car at 280,000 yuan (US$34,500) with another 100,000 yuan (US$12,330) for a season of six races. With that offer we hope to make a great leap forward to push the motor industry in China."

To fuel enthusiasm for racing, the company is planning its own Formula Vesta Championships at the Shanghai Tianma Circuit with their racing cars, and three customers have already signed up. Chang Chechung, a 38-year-old businessman, is one race fan who has put his name on the dotted line. "To introduce real racing cars at a reasonable price to China is a fantastic idea," says Chang.

Regardless of the many hurdles to building a race car in China, Utt believes the country's motor industry is on the fast track of development even if he does not expect to see an all-Chinese Formula One team any time soon.

(China Daily October 14, 2005)