Australia first to board Orient express

AUSTRALIA will play a key role in China’s first steps as an automotive exporter, with 240 Shanghai-built Volkswagen Polo sedans destined for this market in 2004.

It is the first time that a passenger car has been exported to a Western market from China since the industry began to dramatically expand in the late 1990s.

The cars will go on sale here from early 2004 labelled as the Polo Classic, in a single specification and with pricing set in the low $20,000 bracket.

Although it comes with a 1.6-litre engine, the sedan is only mated to a manual transmission at this point. If there had been an auto available, Volkswagen Group Australia (VGA) would have taken 600 sedans per year.

The Polo hatchback is available only with an asthmatic 1.4-litre four-cylinder engine, but in three grades – Club, Elite and Match.

VGA boss Peter Nochar said he had no qualms about taking cars out of China, the company already receiving supply from a variety of origins including the Czech Republic, Mexico, South Africa and – of course – Germany.

"We have computers from China, we have high-tech equipment from China, we have television sets from China, we have ships from China," Mr Nochar said.

"The Chinese can make anything. They make things very well which is why it has become a manufacturing centre.

"As I understand it the cars that are produced in China are at least as good as anywhere else in the world, so there has never been an issue of quality in China." VGA put its hand up for the car during an annual product reveal to distributors in Germany last February.

The deal was announced at a media event late last week at Shanghai Volkswagen, which is co-owned by VW and local partner Shanghai Automotive Industry Corp.

"This proves Shanghai Volkswagen is a truly international competitor," VW board member Folker Weissgerber told Associated Press at the unveiling.

"This car meets all international standards." Associated Press reported the move was unusual for the growing number of foreign car-makers currently setting up operations in China because most focus on that country’s booming domestic market – now the fastest-growing in the world – while only a few plan exports.

Volkswagen has said it plans to export Chinese-made cars to 84 countries within three to five years – if it can bring down costs and improve quality, the report noted.

This is also the first time Shanghai Volkswagen has built a right-hand drive car.

Mr Nochar said Australia was suitable for this exercise because it was a "sophisticated" market in the Asian region and small enough in size for lessons to be learned.

"They didn’t want a big project and the benefit with Australia is it’s quite a sophisticated market in terms of dealer infrastructure and such things," he said.