1. Blistering growth

China's vehicle market maintained strong growth momentum in the first quarter of this year. Sales of Chinese-made vehicles totaled 2.12 million units from January to March, jumping 22.2 percent from a year ago. Meanwhile, sales of passenger cars surged by 28.5 percent to 1.25 million units.

Full-year sales are predicted to reach 8.5 million units, up from 7.22 million in 2006.

2. Export rules

China introduced auto export licensing regulations on March 1 to protect domestic carmakers from cut-throat battles abroad and to weed out firms that are too small to compete internationally. Half of the almost 1,000 Chinese vehicle exporters will be banned from selling cars abroad as a result of the regulations.

China's vehicle exports have been growing rapidly in recent years. However, most of China's export vehicles are low-cost, partly due to price wars between domestic companies.The nation's overall vehicle exports doubled to 340,000 units last year from 2005, with that of passenger cars tripling to 90,000 units. Before the export regulations were introduced, three-fifths of these vehicle exporters sold less than 10 cars a year.

3. MG reborn

Nanjing Automobile Corp began building vehicles under the acquired British brand MG in Nanjing, the capital of East China's Jiangsu Province, on March 27. The first three models were a 1.8-liter MG7 sedan, a 2.5-liter larger MG7 sedan and a 1.8-liter MG TF roadster. This is the first time that an acquired foreign car brand has been produced by a Chinese automaker in the world's No 2 vehicle market.

Nanjing Automobile in July 2005 paid 53 million pounds to buy the MG brand, a closed plant in Longbridge, England, and Powertrain, the engine unit of the collapsed British carmaker MG Rover. Nanjing Automobile is building an annual production capacity of 200,000 vehicles in Nanjing for the MG brand.

4. Chery goes overseas

The DaimlerChrysler supervisory board in February approved a small-car partnership between the Chrysler group and Chery Automobile Co, China's emerging carmaker and leading car exporter. Under the agreement, vehicles built by Chery in eastern China will be sold mostly in North America and Western Europe as Chrysler brands.The partnership is awaiting the nod from the Chinese government. Analysts said there are uncertainties over the Chrysler-Chery partnership as DaimlerChrysler is to sell the struggling US unit.

Last month, Chery also agreed with Argentine industrial group Socma SA to assemble cars in Uruguay in May. The move makes Chery the first Chinese carmaker to produce own-brand cars in Latin America.

Chery's first-quarter overseas sales rocketed almost sixfold to 22,076 cars in 2006 on the previous year.

5. Honda car recall

Japanese carmaker Honda Motor Co's joint venture with Guangzhou Automobile Corp on March 19 started recalling 500,000 vehicles due to power steering and oil pump problems. The move represents the biggest vehicle recall in China since the government launched auto recall regulations in October 2004.

The affected Honda vehicles include 419,613 Accord mid-sized sedans, 68,993 Odyssey multi-purpose vehicles and 10,000 Fit subcompact cars.

Vehicle recalls have taken place in China more frequently than in the past as a result of the compulsory regulations and fast-growing vehicle sales.

6. Greener Volkswagen

German carmaker Volkswagen announced on March 30 that it plans to lower the fuel consumption and exhaust emission of its China-made cars by more than 20 percent by 2010 with the introduction of its latest-generation engines and gearboxes.

The group plans to spend $600 million on the manufacture of its most advanced engines and gearboxes with local partners First Automotive Works Corp (FAW) and SAIC Motor Corp to equip all of its new cars built in China. Volkswagen said the plan is in response to the nation's goal to cut energy consumption per unit of gross domestic product by 20 percent by 2010 from 2005. As the first step of the plan, the firm began producing its 1.8-liter turbo FSI engine on March 30 at its joint venture with FAW in the northeastern city of Dalian.

7. SAIC's own brand

SAIC Motor Corp, China's top carmaker, officially launched its own-brand Roewe 750 sedan on the market at the beginning of March. The Roewe 750, retailing between 231,800 and 276,800 yuan, is the first passenger car model of SAIC, the joint venture partner of Volkswagen and General Motors, since it gave up the Shanghai brand 16 years ago. The 2.5-liter Roewe is based on the Rover 75 technology acquired from failed British carmaker MG Rover.

By April 8, SAIC received over 6,300 orders for the Roewe and it delivered 1,468 units to customers. SAIC said in April last year it planned to roll out 30 own-brand passenger car models with a total investment of more than 10 billion yuan by 2010.

8. Splitting networks

Japanese carmaker Mazda Motor Co said earlier this month that its joint venture with Ford Motor Co and China's Chang'an Motor Corp will get back the sales rights to the Mazda3 compact sedan from Mazda's sales joint venture with another Chinese automaker First Automotive Works Corp (FAW).

Mazda's venture with Ford and Chang'an will build its own sales networks for the Mazda3 and future Mazda cars the venture is to make.

The move signaled Mazda's intention to unify the sales channels of its products made in China with Chang'an and Ford, and FAW.

The venture with Ford and Chang'an in the southwestern municipality of Chongqing began making the Mazda3 in February last year. But the model went on sale in March through the venture with FAW.

Due to the manufacturing-sale partition violating China's auto industry policy, production of the Mazda3 was suspended in April. Production was resumed in November.

Sales of the locally made Mazda3 also resumed in January.

9. Benz makes gov't list

The Chinese government put locally-made Mercedes-Benz sedans on its purchasing list last month. The move will pose a challenge to the dominance of another German luxury car brand Audi in the fleet used by high-ranking government officials.

It will also give an extra boost to the fast-growing sales of Mercedes-Benz in China.

Beijing-Benz DaimlerChrylser Automotive Co, DaimlerChrysler's venture in Beijing, began making Mercedes-Benz E-Class sedans at the beginning of 2006.

Mercedes-Benz's China sales grew by 32 percent year-on-year to 21,200 units in 2006, including 5,500 E-Class sedans assembled in Beijing.

Audi, which started building cars in China in the early 1990s, was previously the sole supplier to the government fleet.

10. Brilliant in Geneva

Brilliance China Auto, the partner of German luxury carmaker BMW, showed three of its own-brand passenger cars in March during the Geneva Motor Show to attract European buyers.

The move made it the sole Chinese carmaker participating in one of the world's top five auto galas, as well as those in Detroit, Tokyo, Paris and Frankfurt. The three displayed Brilliance models were the Zhonghua Zunchi sedan, the smaller Zhonghua Junjie sedan and the Zhonghua M3 sports car.

The company in November clinched a deal with Germany-based car trading firm HSO Motors Europe to sell a total of 158,000 Zhonghua sedans in Europe by 2011, the biggest overseas deal won by a Chinese carmaker so far.

(For more biz stories, please visit Industry Updates)