The company is pressing ahead with an ambitious overseas expansion despite tightening conditions at home, a result of renewed price wars and intensifying competition, as well as the investigation into the alleged appearance of GM designs under a Chery badge. Chery's low-priced cars have done well in China's booming auto market in the last two years, but its market share is coming under pressure from the dominant Sino-foreign joint ventures, which have superior technology and capital resources. A spokesman for Chery on Wednesday confirmed Chinese media reports of the overseas expansion, and also said that the company intended to export about 10,000 cars this year. "We will export auto parts to Iran and assemble the vehicles there, just as Volkswagen did in China a few years ago," he said. "The reason we are building plants in third world countries is that we are not very strong ourselves, and we don't have markets in the US and Europe. We must walk out of the country to strengthen ourselves." The Iran plant will have a capacity of 30,000 units a year, the spokesman said. He did not say which models would be sold overseas. The Chery official said there had been no change in Shanghai Automotive Industry Corp's (SAIC) 20 per cent equity holding in the Anhui-based company. Industry executives have said for months that SAIC, GM's main partner in China, has divested itself of its stake, but SAIC and Chery continue to deny any change to the shareholding structure. SAIC's know-how has proved valuable to Chery, and, in anticipation of SAIC's departure, the Anhui company is understood to be looking for other advanced partners to ally themselves with. Chery's overseas expansion plans are being pursued with a minimal financial outlay on its part. The Chinese company is trading its technology, management skills and parts, such as engines, for access to markets and assembly plants built by its local partners in different countries. PIN/FT