A joint venture half owned by China's Chery Automobile plans to export cars to Europe starting next year with the help of Austrian supplier Magna Steyr, according to a German newspaper report.
Chery Quantum Auto, a 1.5 billion euro joint venture between Chery and Israel Corp., will build three compact models that will be sold in China and also exported to Europe.
The cars will be built at a new factory in Changshu near Shanghai that will have an initial annual capacity of 150,000 units, rising to 500,000,the Financial Times Deutschland said.
Magna Steyr is developing the cars, the paper said. The company is a division of Canada's Magna International and builds cars such as the Mini Countryman, Mercedes G class and Peugeot RCZ in Graz, Austria.
The cars will meet Western standards and are expected to cost between 11,000 and 15,000 euros, the paper said. The models will be sold under a new brand called Qoros, the report said. There are no details yet on how the vehicles will be marketed and distributed in Europe.
The 50-50 joint venture also has a focus on alternative powertrains. Israel Corp., the biggest industrial conglomerate in Israel, has a 30 percent stake in Better Place, an electric mobility firm that specializes in battery exchange centers.
On its Web site, Israel Corp. says Chery Quantum was created to manufacture and market a new, well-differentiated brand of premium, Western-standard vehicles.
"The vehicles will meet high safety and environmental standards by combining Chery's manufacturing capabilities with Western design, engineering and safety standards," the Web site says.
It adds: "Initially, the automobiles will be sold in the fast growing Chinese domestic market, and eventually targeted for sale in Western countries."
Chinese companies have made efforts in the past to break into the European market, but a reputation for poor build quality and poor results in safety tests have led to low sales.
Chery Quantum told the Financial Times Deutschland it will announce its plans in November.