Homegrown brands are "a beautiful butterfly that is struggling free of its ugly chrysalid", said Chen Guangzu, an expert with the China Automotive Industry Consultative Committee.

They will give the Chinese auto industry a competitive edge in the world, said Chen.

Geely's ambitions know no bounds. The company has said it wants to be a world famous brand by 2015, with an annual output of two million cars, including 1.3 million sold overseas.

The year 2006 saw Chinese homegrown brands reach a new level of sophistication -- besides improving product quality and exterior design, they are now developing their own engines.

This August, Geely put China's first continuously variable valve timing (CVVT) engine into production in its plant in Ningbo, in east China's Zhejiang Province. Great Wall said it would equip all its SUVs and pick-ups with its newly developed oil-saving diesel engine. Meanwhile, both Brilliance and Chery turned out their own 1.8T turbo engines.

Statistics show that homegrown brands are taking an increasing share in the domestic market for passenger cars, up from 10.5 percent in 2004 to 26 percent in 2005. Tianjin Xiali, Chery and Geely rank among the top 10 best sellers in 2005.

Sales of homegrown brands outperformed those of Chinese-foreign joint ventures in the first two months this year.

The history of the industry is simple, said Shen Ningwu, vice secretary general of the China Automotive Industry Association. Chinese automakers used to manufacture foreign brands under license, then they began developing and producing new models with foreign companies, and now they are building their own research centers, and nurturing homegrown brands.

Chinese automakers have the bit between their teeth and will become rivals of their counterparts in the United States, Japan and Germany in the near future, said analysts, quoted by the Shanghai Securities News.

China, once known as the kingdom of bicycles, has been transformed over the last two decades into a car culture, with vehicle ownership up 30 times between 1985 and 2004.

A roadways plan devised by the Ministry of Communications will more than double the existing expressway network, bringing it to 85,000 kilometers within 30 years. The roads are needed to accommodate the growing number of cars and to support economic growth.

1

2

3

(For more biz stories, please visit Industry Updates)