OREANDA-NEWS. April 13, 2011. In the rapidly growing Chinese market, the auto sector in particular has been exhibiting brisk growth. New car sales topped 18 million units for the first time in 2010 and have been growing at around 5% each month since. In such a dynamic market, Sumitomo Corporation ("Sumitomo") has been building its presence steadily since the 1980s, initially serving as an automobile import agent and sales dealer.

The landscape of the Chinese auto sector changed significantly with the advent of the 2000s. The country's car-owning population started to increase exponentially thanks to rapid economic growth. Many foreign auto manufacturers scrambled to enter the country to sell their cars, hoping to make inroads into that booming market. However, daunting challenges lay in wait for them. With the lack of an appropriate regulatory environment at that time, foreign car makers had a difficult time obtaining land for their offices and dealerships and in negotiating the different customs and culture.

Sumitomo's solution to such a difficult business climate was to select a powerful local partner, namely, Baosteel Group Corporation ("Baosteel Group"), one of the world's largest steel conglomerates and a state-owned enterprise.

Sumitomo's engagement in the whole supply chain from upstream through downstream, leveraging the combined strengths of the two companies

In the early 2000s, having already built a relationship through previous transactions and regular communications, Sumitomo and Baosteel Group started to consider the possibility of establishing a Chinese joint venture in auto sales. Baosteel Group was looking for an opportunity to branch out into auto sales to complement its existing iron and other material supply business, while Sumitomo was examining new opportunities to leverage its abundant experience and expertise in car dealership developed and accumulated through its operations in 107 locations in 20 countries (as of 2004).

The combination of such aspirations led to the establishment of Shanghai Baosteel Summit Auto Trading Co., Ltd. ("Shanghai Baosteel Summit") in 2007. This was the very beginning of our automobile project in China in collaboration with a world-class state-owned enterprise. The launch of Shanghai Baosteel Summit has enabled us to play a leading role in the Chinese auto market, covering the entire supply chain, from raw material supply to manufacturing and sales. The fact that the joint venture represents a partnership between Sumitomo and Baosteel Group carries considerable weight in terms of abundant financial resources, nationwide consumer confidence as a leading state-owned company, and the interaction of talented individuals.