China's automotive industry, with its bright development prospects, has become a lodestone that has drawn the world's leading iron and steel makers to try there luck.

A recent evidence is the Tuesday launch of the Shanghai Bao steel and Arcelor Tailor Metal Co. Ltd., which was inaugurated in Jiading of east China's Shanghai, including three production lines that were put into operation on the same day.

The Shanghai Baosteel-Arcelor Tailor Metal Co. Ltd. is jointly funded by three investors: two subsidiaries of the Baoshan Iron and Steel Group, which holds 38 percent stake in the joint venture, Arcelor, which controls 25 percent, as well as a subsidiary of the Shanghai Volkswagen Corp., which holds the remaining 37 percent of stake.

The joint venture, which has 267 million yuan (about 32.17 million US dollars) for first-phase investment, has a designed annual production capacity of 2.6 million pieces of tailor metals,and will provide key Chinese automobile manufactures with tailor metals products featuring greater intensity and higher safety.

The annual production capacity of the joint venture will be eventually enlarged to 10 million pieces, according to Ai Baojun, general manager of the Baosteel Co. Ltd.

"Choosing European and Asian companies as partners and creating automotive plank supply chains are aimed at making ourselves well adapted to the development characteristics of China's automotive industry," said Ai.

Earlier this year, Baosteel Group, Luxembourg-based Arcelor and Nippon Steel Corp. of Japan began a cold-rolled steel plant to target the huge automotive industry development space in China.

Industry experts say that by 2005, China's demand for steel in complete automobile manufacturing will rise from 7 million tons last year to 8 million tons. The demand will climb to 11 million tons by 2010.

Source: Xinhua