Asia alternative to flat U.S. auto sales

Asia alternative to flat U.S. auto sales

WASHINGTON (AFP): U.S. automakers are now looking to vibrant
Asian markets to offset expected stagnant sales in North America
and western Europe, the head of the American Automobile
Manufacturers Association said.

"Why Asia?" asked Andrew Card in a speech prepared for
delivery at the New Zealand embassy later in the day.

"It's a simple matter of economics. Motor vehicle sales in
their traditional markets -- North America and western Europe --
are expected to remain relatively flat over the next decade.

"Asian nations, with liberalized markets and rapidly growing
middle classes, provide the best chances for growth -- and
Chrysler, Ford and General Motors want to seize the opportunity."

In Japan, where the auto market was opened wider to U.S.
companies in an agreement signed in 1995, the Big Three plan to
establish 200 dealer outlets by the end of the year and to
increase the total to 1,000 by the end of the decade.

But Card acknowledged that increasing dealerships will not be
easy in Japan and noted that to date only 29 outlets had been
secured.

In India a fast-growing middle class numbering between 200 and
300 million people is now free to begin buying a range of
vehicles. Ford has invested US$400 million on a joint venture in
India while GM has committed $100 million to a plant eventually
capable of turning out 100,000 units a year.

Card pointed to Thailand as Asia's largest auto market,
notably as Thais "love motor vehicles, especially pickup trucks."

Thailand is second only to the United States in worldwide
pickup truck sales, he said, adding that Ford hoped to capture 10
percent of the Thai pickup truck market.

While China has begun to promote the use of private cars, Card
noted that "the present political situation ... and the
difficulty of negotiating with the Chinese government" are
problems that cannot be avoided.

Nevertheless, GM is working on a joint venture that could
produce up to 100,000 Buicks a year in China, Chrysler is already
assembling Jeep Cherokees there and Ford has agreed to pay $40
million to take a 20 percent stake in a Chinese truckmaker.

Card also cited promising opportunities in Vietnam, Indonesia
and South Korea, although with the latter more steps were need to
be taken to deregulate the vehicle certification process.