JAPANESE DELEGATION SEEKS TO MAKE INROADS IN CHINESE AUTO MARKET

JAPANESE DELEGATION SEEKS TO MAKE INROADS IN CHINESE AUTO MARKET

The Germans have made the most progress and the Americans the most noise, but the Japanese are proving quietly persistent in getting into China's automotive sector.

Executives from Japan's big auto producers opened three days of talks in Beijing Monday with Chinese government officials blandly described as ''discussing the future of automobile industry."Masami Iwasaki, vice chairman of Toyota Motor Corp. and chairman of the Japan Automobile Manufacturers Association, said Japanese automakers are happy to enter the Chinese market.

So are all the world's other main players. Those not already in place are being stymied by Chinese rules forbidding new assembly operations until 1997 at least, to allow time to reorganize the chaotic industry.

In the meantime, China is encouraging more foreign investment in the parts sector.

Today and Wednesday, the Japanese meetings will focus on development of China's auto parts industry and Japan's cooperation, officials said.

The Japanese delegation numbers some 140 members, including government officials as well as auto executives. About 100 Chinese officials and executives are expected to attend the sessions.

Germany's Volkswagen AG tops the league of overseas manufacturers working in China through its joint venture in Shanghai and various other operations of its own and its subsidiary, Audi AG.

The Mercedes-Benz division of Daimler-Benz AG recently snatched a coveted deal to make minivans and engines in Shanghai away from Ford Motor Co. and Chrysler Corp. The latter has a successful Jeep joint venture in Beijing.

Other European firms with car plants in China include Citroen and Peugeot

from France.

Japanese firms, constantly on the lookout to cut costs and, like the others, envisioning a huge market in China, have nonetheless been low-key in their approach so far. China last year expressly invited Japanese vehicle builders to "consider advancing into the market."

Toyota has designed a seven-seat tour bus for the China market, which has the functions of both a bus and a car. Daihatsu Motor Co., of which Toyota holds 16 percent, supplied technology for one of China's largest domestic sedan manufacturers.

Honda Motor Co. signed an agreement in 1993 with the Yangcheng Automobile Co. Ltd. to produce cars in southern Guangzhou. Honda will ship the main parts

from Japan, while other equipment is purchased locally.

Suzuki Motor Corp. signed a deal in 1993 for joint production of 20,000 sedans beginning this year, rising to 50,000 three years later. Suzuki holds 35 percent of the venture, trading house Nissho Iwai Corp. 18 percent and

Chang'an Automobile Corp. 50 percent.

China produced 1.35 million vehicles last year, of which only 250,000 were sedans. By the year 2000, China expects to have annual production capacity of 3 million vehicles, half of them passenger cars.

Demand for passenger cars this year is forecast at 320,000 against production of 400,000.

Official projections put automobile ownership at 10 million vehicles this year, compared with 8 million at the end of 1993.

China could become the world's third biggest car market after the United States and Japan by the year 2010, with annual demand of 2.5 million to 3 million cars a year, official Chinese estimates say.