GUANGZHOU: Triangle Motors Ltd, a renowned vehicle dealer in Hong Kong, will
soon set up a solely-owned automobile retailing business in Guangzhou.
It will become the first and only wholly overseas invested company to sell
automobiles on the mainland since China began opening up in late 1970s.
The launching of the new company only became possible after the
implementation of the Closer Economic Partnership Arrangement between the
mainland and Hong Kong/Macao, or more precisely, after June 1, 2004, when the
State's new regulations on overseas investment in the commercial sector took
effect.
Previously, only those companies invested in by domestic business people or
joint ventures in which the mainland side had a larger stake were allowed to run
automobile retail businesses.
According to the latest regulations, commercial service providers from Hong
Kong and Macao have been allowed to apply for the setting up of solely-owned
automobile retail businesses on the mainland since the beginning of last year.
However, applicants must meet the following prerequisites:
their annual sales volume must not have fallen below US$100 million in the
three years before their application;
their assets must have stood at more than US$10 million in the year prior to
their application;
the registered capital of any new ventures must not be lower than 10 million
yuan (US$1.20 million), except those set up in the middle and western regions of
the nation, where the figure is set at 6 million yuan (US$722,892).
"We have gained approval from the State authorities and we are fully engaged
in preparatory work," an executive with Triangle Motors Ltd's marketing
department, who identified himself as Mr Ng, told China Daily. "We will
hopefully make an official announcement later this month."
Total capital input for the new company in Guangzhou stands at 50 million
yuan (US$6.02 million) and it has a registered capital of 30 million yuan
(US$3.61 million). The new facility will retail imported ISUZU vehicles.
Ng refused to disclose any further details.
Li Lin, a veteran automobile industry adviser to the municipal government of
Guangzhou, attributed the attempt by Triangle Motors Ltd to set up a retail
facility in Guangzhou to the tremendous market potential of the city and the
surrounding boom towns of the Pearl River Delta, and to the company's strategic
business plan for the mainland.
Official sources say the Pearl River Delta region accounts for about a third
of the nation's vehicle market and its momentum remains robust.
It is reported that Triangle Motors has set up a joint venture with ISUZU in
Shanghai, and that the company has established sales outlets in nine cities
across the mainland.
Triangle Motors Ltd is the cornerstone of Dah Chong Hong Ltd's vehicle
business, a company wholly owned by CITIC Pacific.
Triangle Motors Ltd has been the authorized dealer of ISUZU vehicles in Hong
Kong since 1972.
