i really need help summarizing :(

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i really need help summarizing :(

by habbouba

Apr 29, 2012

BEIJING--China's Zhejiang Geely Holding Group Co.--the owner of Swedish car brand Volvo--plans to start assembling Geely cars in Egypt this year for sale in markets across North Africa in cooperation with a local company, according to a person close to the companies. The move, which the auto maker is expected to announce as early as Wednesday, highlights a growing push into overseas markets by Chinese auto makers as car demand growth slows at home. Chinese car makers have failed to make much headway in penetrating the U.S. and European markets, but their export push is gaining momentum in far-flung corners of the world like Egypt, Ukraine and Indonesia. Geely and the Egyptian company, GB Auto S.A.E., have agreed to sell two types of Geely passenger cars in markets across North Africa, according to the person familiar with the matter, starting with two models in Egypt in the second quarter of this year. Those cars--an entry-level car called the Panda and the midsize sedan Emgrand 7--are...See MoreBEIJING--China's Zhejiang Geely Holding Group Co.--the owner of Swedish car brand Volvo--plans to start assembling Geely cars in Egypt this year for sale in markets across North Africa in cooperation with a local company, according to a person close to the companies. The move, which the auto maker is expected to announce as early as Wednesday, highlights a growing push into overseas markets by Chinese auto makers as car demand growth slows at home. Chinese car makers have failed to make much headway in penetrating the U.S. and European markets, but their export push is gaining momentum in far-flung corners of the world like Egypt, Ukraine and Indonesia. Geely and the Egyptian company, GB Auto S.A.E., have agreed to sell two types of Geely passenger cars in markets across North Africa, according to the person familiar with the matter, starting with two models in Egypt in the second quarter of this year. Those cars--an entry-level car called the Panda and the midsize sedan Emgrand 7--are going to be initially brought into Egypt from China. But the two companies plan for GB Auto to assemble Geely cars in Egypt using imported kits during the third quarter, the person said. Geely and GB Auto plan to boost in a few years the pace of production to as many as 30,000 cars a year, with an aim to raise their annual output to 50,000 cars, the person said. Overall Chinese exports of affordable cars and trucks to emerging markets--many priced well below 100,000 yuan (about $15,900), with some selling as low as 40,000 yuan--are likely to have reached 800,000 vehicles in 2011, up about 40% from 2010, according to consulting firm LMC Automotive. Analysts generally believe that Chinese vehicle exports bound for Africa, Latin America and the Middle East are likely to grow at a similar annual pace over the next few years. As growth in car sales slows in China, Chinese car makers will likely "look for any way possible to unload their built-up capacity," leading to an even more aggressive push overseas, said Michael Dunne, head of Hong Kong-registered consulting firm Dunne & Company. Moreover, homegrown Chinese auto makers, faced with growing competition at home from global auto makers and their Chinese joint-venture partners, "also need to survive through export," Mr. Dunne said. At the forefront of China's automotive export drive is Geely. Geely, which acquired Volvo from Ford Motor Co. in 2010, hopes to reach an annual sales total of one million cars outside China by 2015. Those foreign sales would make up roughly half of its sales goal for that period. Geely's technology and product chief, Frank Zhao, said in an interview late last year that those targets are "stretch" objectives Geely might not be able to deliver by 2015. "Products, manufacturing, brands and sales networks... all those things have to be prepared, and that takes time," he said. "But compared to four or five years ago, we have improved so much, and you can see that in our product," he said, adding that the improvement should help make its overseas foray more feasible. Geely has ambitions beyond the emerging world: The company said in December it plans to start selling by the end of 2012 a Chinese-produced midsize sedan in the U.K. through a local wholesaler--a move that Geely officials say marks the beginning of a broader push into advanced markets in Europe and the U.S. Last year, Geely sold about 38,000 cars outside China, up 76% from 2010, according to the company. Thanks in part to its push into North Africa, the Hangzhou-based auto maker is now aiming to grow overseas sales by more than 50% this year. The company projects a roughly 10% increase in overall sales this year. Last year it sold a total of 432,000 cars, according to the company. Aside from the planned Egyptian assembly plant, Geely has five small-scale plants in Russia, Ukraine, Indonesia, Sri Lanka and South Africa producing cars with nearly completed vehicle-assembly kits. It plans to add a few more such factories in the Middle East and South America, the person said. Write to Norihiko Shirouzu at norihiko.[email removed].

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