Chery Automobile Co and Japan’s Fuji Heavy Industries have agreed in principle to build Subaru vehicles in Dalian, Liaoning province, and are now seeking approval from regulators. China’s promising SUV market may double in size from 2010 to 2015, according to market research firm JD Power. Last year, Subaru sold more than 54,000 cars and SUVs in China, a 57% increase over 2009. In the first four months of this year, 24,000 Subarus were sold in China, but in the long run the brand may hit a bottleneck if it continues to solely rely on imports, according to Zeng Zhiling, Director of JD Power Asia Pacific Forecasting. Chery now has no joint venture partner so it could invest “100% energy” in the relationship, he said. Zhang Yu, Managing Director of industry consultancy Automotive Foresight (Shanghai) Co, said he is optimistic about regulatory approval. With local production, Subaru would be able to offer more competitive prices. Chery, based in Wuhu, Anhui province, was the No 7 carmaker in China with sales of 680,000 vehicles last year. The company has invested substantially in research and development (R&D) in own-brand vehicles in the past few years and gained a strong foothold in the medium and low-end market. The company previously failed in attempts to form partnerships with Chrysler and Fiat. A Company Spokesman said Chery expects to increase sales by 17% to 800,000 vehicles this year. The largest domestic car exporter also aims to raise its overseas shipments to 120,000 units from 90,000 units last year, the China Daily reports. Chery Automobile Co will break new ground in Latin America when its USD200 million factory in Venezuela starts producing vehicles for the region later this year. It will be Chery’s second-largest factory in Latin America, following its existing auto manufacturing facility in Brazil. The new plant will produce 20,000 budget cars annually.

Alcatel-Lucent has signed a research memorandum with China Mobile Communications Corp, in areas such as next generation mobile networks and cloud computing. Ben Verwaayen, Chief Executive of Alcatel-Lucent, said the partnership will have a fundamental impact on the company as the focus of the world’s telecom market is changing from networks to applications and services. Closer ties between telecom carriers and telecom gear makers are therefore required to provide better services to end-users. The research areas will include the integration of China Mobile’s Cloud-RAN and Alcatel-Lucent’s Light-Radio technology, advanced antenna technology and green networks. Results of the joint research will materialize in the market in the next 12 to 18 months, Verwaayen said, adding that he is optimistic about China’s telecom industry in the years to come, as the market has always been growing faster than industry expectations. The company plans to aggressively expand the operation of Alcatel-Lucent Shanghai Bell, its flagship joint venture in China. Romano Valussi, President of Alcatel-Lucent’s China business, said the company had achieved double-digit growth in China during the past three quarters, the China Daily reports.

Shanghai Baosteel Group Corp is planning to set up a beverage can factory in the Singapore Industrial Park, close to Vietnam’s capital Hanoi. Two-piece steel beverage cans made at the factory, Baosteel’s first outside China, will be sold in Vietnam and other Asian countries. Demand for beverage cans has been growing fast in Vietnam. Baosteel is now negotiating import tariffs for machinery with the Vietnamese government. The factory will be about the same size as the company’s can-producing facilities in China. Baosteel is the only Chinese company capable of making two-piece steel cans, which are degradable and cost less to produce than aluminum cans. piece steel cans now account for over 20% of China’s packaging-can market, according to figures released by Baosteel. The steelmaker said in October that it will become China’s biggest beverage can maker by 2015, when the annual capacity of two-piece steel cans will reach 10 billion and sales will top CNY10 billion.

Chinese airlines are opposed to the European Union’s move to include the aviation industry in the Emission Trading Scheme (ETS). The China Air Transport Association (CATA) said that significant flaws exist in the ETS if the EU includes the aviation industry in the scheme, and the rules themselves violated international law. The organization said that the aviation industry’s emission problems should be solved by consensus between governments and airlines rather than by a unilateral decision by the EU. The association will urge the Chinese government to take “corresponding measures” to safeguard domestic airlines’ interests and rights in the international market if the EU insists on the move. The EU approved a proposal in 2008 to include the aviation industry in the ETS after emissions from the sector doubled since 1990. They account for around 3% of the EU’s total carbon dioxide footprint. Under the ETS, all flights departing or landing at EU airports will start emission trading from January 1, 2012, which means airlines that exceed their carbon dioxide limit will have to buy spare permits from more efficient businesses or face a fine. The number allocated to airlines for free is 213 million metric tons next year and the cap will drop to 208.5 million tons per year from 2013, according to the EU. Airlines will face a bill of up to €1.4 billion in 2012, rising to €7 billion in 2020, according to Thomson Reuters Point Carbon, the Shanghai Daily reports. The China Air Transport Association (CATA) is preparing legal action. It is estimated that the price of a ticket from China to European countries could rise by CNY200 if the lawsuit is protracted and the Chinese airlines are forced to pay the tax from January 1 next year.