Bus maker gains foothold in Venezuela

Coach buses manufactured by China's Zhengzhou Yutong Group Co are loaded onto a cargo carrier bound for Venezuela, in Lianyungang Port, Juangsu province, on Tuesday. WANG CHUN/CHINA DAILY

Zhengzhou Yutong Group Co, China's largest bus manufacturer by production capacity, is pursuing a stronger foothold in Venezuela by assisting the country to build a new plant and more after-sales service stations, as Chinese automakers focus on this new and lucrative market in Latin America.[Special coverage]

The plant in the western state of Yaracuy has an expected assembly capacity of 3,500 buses a year by 2017. It will produce three models of buses for urban, suburban and rural use, including 25- to 54-seat diesel and gas buses.

Tang Yuxiang, chairman of Yutong Group, said the major force behind this strong partnership is Venezuela's stable economic growth, boosted by its energy sector, fast transportation infrastructure development and enhanced regional connectivity with neighboring nations.

The Zhengzhou-based company sold 660 buses of various types to the Venezuelan market last year for total of 373 million yuan ($60 million).

To boost the country's public transportation, the Venezuelan Land Transportation Ministry has launched more than a dozen urban and suburban bus systems to improve service in major Venezuelan cities since last year.

As part of a bilateral agreement signed in September when Venezuelan President Nicolas Maduro visited China, more than 2,000 Yutong buses will be shipped to Venezuela within this year.

"Jointly building a bus plant will allow us to further intensify our engagement in Venezuela. We will not only export buses, but also secure long-term development through offering parts and after-sales services in the country," Tang said.

Apart from Yutong Group, other major Chinese automakers, such as Beiqi Foton Motor Co, Anhui Jianghuai Automobile Co, Great Wall Motors Co and Changan Automobile Group Co, have been lured to countries in the Latin American market including Venezuela, Chile, Brazil and Argentina, seeing it as a strategic pivot in their global vision.

Wang Feng, deputy director of the overseas department at Zhengzhou Yutong Bus Co, a main subsidiary of Yutong Group, said the Chinese domestic bus market has been saturated since 2007, when bus manufacturers stumbled in the race to win big-ticket orders. The emerging overseas market then became a lifeline for many auto companies, including Yutong Group.