MSN Money: Shell's Jiffy Lube Chain Rolls Into China: “Royal Dutch/Shell Group and China's top car maker aim to open 600 of Shell's Jiffy Lube maintenance outlets in China by 2015…”: “Shell executive vice president David Pirret told reporters on Monday the partners hoped in the venture's first year to launch 10 Jiffy Lube outlets, introducing to China a U.S. drive-in chain that specializes in 10-minute oil changes and other car tune-ups.” (ShellNews.net) 18 April 05

By Godwin Chellam

SHANGHAI (Reuters) - Royal Dutch/Shell Group and China's top car maker aim to open 600 of Shell's Jiffy Lube maintenance outlets in China by 2015, betting on a burgeoning auto culture as more people get behind the wheel.

The world's third-largest oil firm has set up a 50-50 venture with an arm of Shanghai Automotive Industry Corp., a local partner of General Motors Corp. and Volkswagen A.G., with an investment of $23 million.

Shell executive vice president David Pirret told reporters on Monday the partners hoped in the venture's first year to launch 10 Jiffy Lube outlets, introducing to China a U.S. drive-in chain that specializes in 10-minute oil changes and other car tune-ups.

More than half of the eventual 600 Jiffy Lubes would be franchises, he added. The venture awaited government approval.

``No other market grows like it,'' Pirret told reporters. ``We can't not be here.

China was the largest lubricants market in the world after the United States and was growing 8 percent annually, Pirret said. Shell's Chinese lubes business was already one of its five largest worldwide, and growing at double-digit rates.

China's auto market has gone into overdrive in the past three years as millions have taken to the roads for the first time, though car sales have slowed dramatically since late 2004 as auto makers have grappled with growing overcapacity and a margin-eroding price war.

But although the country's vehicle market is now the world's third largest, motoring culture is still in its infancy, with such facilities as car-washes still unheard-of.

The market for replacement parts and on-the-road services is filling up rapidly with local and foreign rivals, especially the thousands of cheaper maintenance stores scattered around the country, but those concerns were brushed off.

``There are many mom-and-pop shops around that are able to do an oil change, but that's really not what we do,'' said president of Jiffy Lube Larry Burch. ``We sell time.''

New Focus Auto Tech Holdings, a Shanghai-based chain of auto parts and repair shops, hopes to raise up to HK$94 million ($12 million) in a Hong Kong initial public offering.

It now operates 39 retail outlets in Shanghai, mostly under its Autolife brand, and plans to expand its network to 120 by the end of 2005.

And Japan's Autobacs Seven Co. Ltd. has announced a car service venture with the Shanghai Paian Group, aiming to run 30 stores in eastern China within five years.

© 2005 Reuters

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