Chinese cars you could soon see in the U.S.

Chinese cars you could soon see in the U.S.
http://www.msnbc.msn.com/id/26075484/

Don't be surprised if your next car has a "Made in China" label on it.

As the world focuses on the XXIX Summer Olympic Games in Beijing,
Chinese automakers are looking beyond their borders. They aim to sell
vehicles in North America, one way or another.

"It's definitely not a matter of 'if,' but 'when,'" says Lonnie Miller,
director of industry analysis for the automotive research company R.L.
Polk and Co. in Southfield, Mich. Miller expects the first Chinese-built
vehicles to go on sale in the United States by 2010 at the earliest.
They will most likely be small, fuel efficient and inexpensive, he says.

Most will come from companies unfamiliar to American consumers. Brands
like Chery, Changfeng and Great Wall hope to follow in the footsteps of
established makes from other Asian countries such as Honda, Hyundai and
Toyota, all of which have thriving businesses in North America.

We've compiled a list of Chinese vehicles that seem likely candidates
for export to the United States based on information from industry
analysts and other sources. See the full list by clicking on the “slide
show” link below.

If the first wave of Chinese cars catches on, analysts expect
manufacturers to expand their exported lineups with midsize cars, sport
utility vehicles and other models within another two to five years.
Miller says Chinese automakers could eventually absorb as much as
one-tenth of the United States' new-car market if they're successful.

The design of many Chinese cars might seem derivative, but at least
their names are interesting. Imagine driving around in a Great Wall
Hover, a midsize SUV.

Chrysler recently signed a memorandum with Great Wall to explore a
long-term business relationship. Great Wall is already successful in
Eastern Europe and South America and is a leader in producing SUVs for
China, says Sachin Rustagi, editor of China Car Forums.

The Brilliance BS4 is another model with an inventive name, though it's
the company's name, not the model moniker, that's noteworthy. Brilliance
Auto was the first Chinese automaker to set up shop in the United
Kingdom, initially offering the midsize BS6 sedan and most recently
adding the compact BS4.

The company has expressed interest in selling cars in North America
within "about two years."

A growing industrial giant
Auto sales in China have skyrocketed over the last decade, swelling 25
percent a year since 2002, according to McKinsey and Company, a New
York-based management consulting firm. China overtook Japan in 2006 to
become the world's second-largest new-vehicle market, and industry
insiders believe it might eventually overtake the United States as the
planet's largest car market.

Last year 24 domestic Chinese automakers and 38 import brands sold more
than 5.2 million vehicles in that country, according to J.D. Power and
Associates in Westlake Village, Calif. The best-sellers are Honda,
General Motors, Toyota and Volkswagen.

With a large capital base, low-cost labor and expertise in manufacturing
and exporting goods to the Western world, China will eventually become a
leading exporter of cars and trucks, industry observers predict.

J.D. Power reports China exported nearly 185,000 passenger vehicles last
year — a 45 percent increase over 2006 — with the majority of them going
to developing markets like Russia, the Ukraine and Venezuela. Analysts
suggest Chinese automakers are, in effect, working their way across the
globe with U.S. shores being viewed as the ultimate beachhead.

Thus far, efforts of Chinese automakers seeking to enter the American
market have unraveled before even getting off the ground.

In 2005, automotive entrepreneur Malcolm Bricklin, the man who helped
bring Subaru and Yugo to America, formed Visionary Vehicles to import
low-cost cars from China's Chery Automotive. After a few well-publicized
auto-show appearances, the partnership dissolved.

Chery decided to cast its fate with Chrysler to help bring its products
to the Western Hemisphere. Visionary Vehicles has subsequently filed
suit against Chery to recover unspecified monetary damages for what it
claims were fraudulent business practices.

Similarly, a company called Chamco, which stands for China America
Cooperative Automotive, made a splash at the most recent Los Angeles and
Detroit auto shows by displaying two models — a small SUV and pickup
truck — it planned to import from China's Hebei Zhongxing Automobile
Company beginning in 2009 and sell through its own dealer network.

The deal has fallen apart, however. A posting on the company's Web site
says: "The Board of Directors has temporarily halted most of Chamco
Auto's operations." Inquiries made to the company were not answered.

Several other Chinese automakers are reportedly considering entering the
U.S. market, but industry insiders say the first models will likely be
imported and sold by third-party automakers under their own nameplates
to fill gaps in their lineups. "An established brand can carry a new
entrant in terms of a certain familiarity and comfort among consumers in
terms of what the vehicles can represent, so it's probably a smart
choice," says R.L. Polk's Miller.

East-West alliances
Chery Automotive is already set to produce a version of its diminutive
A1 for Chrysler, to be sold in Mexico and South America as the Dodge
Breeze. There are no plans to bring the Breeze to the United States,
says David Elshoff, a Chrysler spokesperson. But he does acknowledge
that Chrysler is working with Chinese partners to fill holes in its
domestic lineup.

Chrysler currently lacks small, fuel-efficient cars American consumers
are turning toward in the midst of high gas prices. A version of the
Chery A3 sedan is an example of one model Chrysler could potentially
repackage and sell in the United States.

"We are eager to begin exporting small cars from China as soon as
possible that will attract new customers in two segments in which our
brands are underrepresented: very young buyers and entry-level buyers,"
Elshoff says. "It's generally understood that the only way to compete in
the ultra-price-sensitive subcompact market requires the most low-cost
manufacturing base."

As logical as it might seem to leverage Chery Automotive's expertise in
building inexpensive small cars, Chrysler is proceeding cautiously. "We
will not offer a vehicle until we are 100 percent convinced that it
meets global standards and requirements," Elshoff says.

Therein lies one of the biggest challenges.

According to a 2007 J.D. Power Initial Quality Survey, the Chinese auto
industry's average problems per hundred vehicles were nearly twice those
of cars currently sold in the United States. What's more, many Chinese
models have received dismal scores in well-publicized safety tests
conducted by independent agencies in Europe and elsewhere.

"The first challenge for Chinese automakers is that they will have to
comply with U.S. emissions and safety regulations — this is a big job,"
says Tim Dunne, J.D. Power and Associates' director of Asia-Pacific
market intelligence. "Besides the regulatory hurdles, the vehicles will
have to meet U.S. consumer expectations for quality, dependability and
availability of service and parts. On top of that, a Chinese-branded
automaker would have to build its own distribution and dealership
network in the U.S., which is a monumental undertaking when starting
from scratch with an unknown brand."

Chinese automaker Geely Automobile Holdings recently announced plans to
build a $500 million assembly plant in Mexico with an eye on producing
300,000 vehicles annually for distribution in North, South and Central
America.

"This seems to make sense due to what will probably be a lower upfront
investment, less regulation and traditionally lower labor rates," says
Dunne. "This strategy also allows manufacturers to sell in these local
markets more easily — their proximity just makes it easier to operate
the business."

There's also the possibility that one or more Chinese companies could
just buy their way into the United States. General Motors is currently
shopping its underachieving Hummer brand, and rumors have surfaced that
Chery, Dongfeng Motors and Shanghai Automotive Industry Corp. have been
eyeing Ford's Volvo division, though none have been confirmed.

Acquiring an established brand might be the easiest way for Chinese
companies to get a foothold with upscale U.S. car buyers, because in
that segment perception trumps reality, experts say, and even five or 10
years down the road, the idea of a Chinese-branded luxury car made in
China might be too tough of a sell with those shoppers.

"The public will buy most brands that are sold to and managed by other
companies no matter where they're located, so long as they maintain the
same 'shape and feel' to the product," R.L. Polk's Miller says. "The
question here is whether the consumer will look under the hood and see a
lot of Chinese script on the engine, or are they going to be able to
tell that it's still a Volvo?"

Click on the “slide show” link above to see the Chinese vehicles likely
to hit the United States first.

 

Then they've gotta greatly increase their technology. I've seen a few
Chinese cars in Mexico (currently no legal to bring them to USA).
They're JUNK. Open the hood and these new cars look similar to cars
built in the USA during the 1950's or so. No thanks!

 

But this seems to be what Chrysler plans on doing. Does not bode well
for Chrysler's "future".

 

Hey, if it had a flathead 6 and Fluid Drive, I would be interested!
Proud owner of a 1940 Chrysler Royal.

 

Chrysler is throwing darts at almost anything, with the hope they hit a
few winners.
I feel sorry for those who buy these Chinese cars in the first 10 to 20
years.