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Guangzhou Automobile looks outside China for growth

A man stops to look at GAC Motor's range-extended electric hybrid F-jet concept vehicle for display in Cobo Center in advance of media previ
A man stops to look at GAC Motor's range-extended electric hybrid F-jet concept vehicle for display in Cobo Center in advance of media previ

By Norihiko Shirouzu

NOVI, Michigan (Reuters) - Guangzhou Automobile Group Co <601238.SS>, one of China's big state-owned auto enterprises, will look overseas more and more for growth, a senior company executive said here on Sunday.

The executive - GAC Motor Group Vice President Xiangdong Huang - told an industry conference in the Detroit suburb of Novi that the company plans to focus on exports, as part of a 2015 strategy.

As GAC Motor's passenger and commercial vehicle technology matures, and the once-explosive growth of China's domestic auto market slows, "it is logical that GAC emphasizes overseas market expansion", Huang said in a speech.

Specifically, GAC Motor will try to make inroads in emerging markets around the world with a lineup of affordable no-frills, gasoline-fueled cars that the company already markets in China, Huang said. He said those emerging markets included Southeast Asia, the Middle East, Latin America and Eastern Europe.

He said global auto sales are likely to hit 100 million cars a year by 2020, and more than 55 percent of that volume is expected to come from the emerging world.

Global sales in 2012 were seen by most analysts at around 81 million.

"Local economic growth is strong (in those markets), and trade barriers are relatively low. Chinese auto products are hopefully competitive in this type of market," Huang said. "This will be our main target region in the next few years."

The executive, visiting the Detroit area for the North American International Auto Show that kicks off on Monday, said GAC Motor believes advanced markets such as the United States will likely remain out of reach for the Chinese indigenous automaker for the foreseeable future.

Still, while GAC Motor's conventional gasoline cars are unlikely to be seen as competitive in the U.S. and other advanced markets, its "new energy" cars, such as those GAC Motor plans to exhibit at the Detroit show, are a different story.

As part of the 2015 strategy, GAC Motor plans to "use new-energy vehicles to enter developed markets", Huang said.

When asked after the speech on the sidelines of the conference, he declined to say which advanced markets GAC Motor plans to focus on but noted that those target advanced markets included the United States.

In Detroit, GAC Motor will exhibit several "newly developed" cars, including three green vehicles: a four-wheel-drive hybrid sedan called Trumpchi that is ready for mass production; an electric SUV "prototype" dubbed Trumpchi GS5; and the electric hybrid E-jet, a concept car, according to the company.

(Reporting by Norihiko Shirouzu; Editing by Dale Hudson)

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