MercoPress. South Atlantic News Agency

China chooses Uruguay for its first South America car plant

880/1.000 cc model known as Chery's QQ

China's largest domestic automaker announced Friday the opening of an assembly plant in Uruguay with an Argentine partner, marking the first investment by a Chinese company in an auto factory in South America.

Chery Automobile Co. (51%) will open the facility with Argentina's SOCMA Group (Franco Macri) (49%) said Zhang Dayong, a spokesman for Chery, which is based in the eastern Chinese city of Hefei. The first model to be assembled is the Chery designed SUV Tiggo with a production target of 25.000 by the end of 2008, to be sold mainly in Argentina, Brazil and Uruguay. Chery last January announced it had plans to open factories in South America, the Middle East and Eastern Europe. The company already assembles vehicles abroad with local partners in Iran, Malaysia, Russia, Ukraine, Brazil and Egypt. Chery which was started in 1997 is the fourth-largest carmaker in China's fast-expanding market and sold 305,200 vehicles last year, up 61% from 2005, according to official reports. Lately it has signed agreements with several large international manufacturers: with Italy's Fiat for the provision or engines and with Daimler-Chrysler for the assembly of a small vehicle to be sold mainly in the US market. The agreement for the Uruguayan plant was signed in Beijing between Mr. Macri and Chery officials and with the presence of China's Deputy Premier Wu Yi and Minister of Trade Bo Xilai. Although he assembly plant will be located in Uruguay most of the auto-parts will be supplied by Argentina, China and to a lesser percentage Brazil. Following the first production stage, which should begin this year, "our goal is to expand to the whole of the Latinamerican region and assess demand for other possible Chery Automobile models", said Argentine sources which anticipated plans for a smaller engine 880/1.000 cc model known as Chery's QQ. Chery Automobile already has a Uruguayan partner (Bognor) established in China but for the production of special plated limousines for civilian use.