Visionary Vehicles ends its venture with Chery

Malcolm Bricklin’s plan to be the first U.S. importer of Chinese autos hit a snag as his Visionary Vehicles LLC said it ended a joint venture with the company that was to build the vehicles.

Bricklin, 67, began meeting other Chinese automakers during last week’s Beijing Auto Show after deciding against an exclusive relationship with Chery Automobile Co., Visionary spokeswoman Wendi Tush said Wednesday. Chery may still assemble some cars for New York-based Visionary on a contract basis, she said.

But as for China… they WILL become a major factor in the auto biz. It’ll take some time, but they understand the value of taking the long view. They’ll begin with deals with some established players to get into the market and learn how it works. Then they’ll copy some designs and put forth their own brands.

They won’t be competing with BMW or Porsche or any of the premium stuff anytime soon, but they know there is a market for cars priced like Kias and Hyundais. And as those companies move up market China will be on hand to replace them. I can see China selling basic entry-level cars for under $9K and Camry-like appliances for maybe $12K. The things may (or may not) be made of recycled Tsingtao beer cans, but people will buy them.

Hey, it’d be great to have another inexpensive automotive alternative, but this guy’s history speaks volumes. Caveat, uh, drivor.

http://auto.geely.com/product.do?method=list&sort=33

http://www.vvcars.com/importer.php?page=product

The questions are:

What does this car do for me and why would I want one?

Is it cheap? That only matters if I want it. I can buy a brand new, 0 mile Chrysler PT Cruiser for $9988. Does that alone make me want it? No, it’s just not enough on it’s own.

Is this China car fast? Because if it’s slow, then I don’t want it.

If this car is slow, does it get good gas mileage? Because if it only gets 20 or 30 miles per gallon, the vehicles I already have do that and the market is full of vehicles that get that so what makes this particular China car special?

This car is going to have to offer something or everything that nothing else does.

Cheap and fast? That would sell.

Cheap and gets really good mileage. That might sell OK(about as good as Hyundai’s and KIA’s sell).

Now if this car was really fast, and it was electric(X1, Tesla, etc,), and it was cheap, then it would sell…

But if it’s just a run of the mill 4 banger with about 150hp, and gets about 30mpg, and costs $16k+; then it’s not even worth the boat ride over here.

But, would I buy this car to commute to work in if it was $4,000 brand new… Hmmm.. I just might..

A brand new car for $4000? That sound’s pretty good actually. If it’s cheap enough, then it will sell well. Price alone could sell these cars, but it would have to be really, really cheap considering the $9988 PT Cruiser is just not cheap enough to motivate one to run out and buy one on price alone.

Volvo built (assembled) cars for Canada (and even sold some in the US) in Halifax, Nova Scotia from the early 1960’s until the 1999 acquisition by Ford. By far the most satisfactory maritimes automotive assembly operation and the longest lasting.

CMI built (assembled) Toyota and Isuzu cars for Canada in Sydney, Nova Scotia in the late 1960’s.

Renaults and Peugeots were (natch!) assembled in a Quebec assembly plant in the late 1960’s.

Finally, Hyundai built Hyundai Sonata cars from about 1997 for a few years in a Quebec plant until they apparently discovered that the Quebecois are “allergic” to work, and thus pulled out the plant. They’ve recently placed a US plant in operation, having done their homework a lot better this time.

I wonder if the Chinese car companies would succeed IF they did not import built-up cars, but imported kit components and assembled the cars here? Would people pay 25% less than “normal” market pricing for a comparable car, say, instead of 30% less, if they knew it was providing a few thousand jobs in the US?

Maybe not, upon reflection of the hoards of people buying cheap Chinese stuff every day in our country at Wal-Mart, Sam’s Club and all manner of other stores (don’t point fingers at Wal-Mart until you check through your own home and see where at least 25% of your “stuff” bought in the past few years was made – it’ll be China, guaranteed – the original “price point” and brand names scarcely matter).

If China’s gonna be a automotive player in the States, its not gonna be with Bricklin’s help. But I must admit I like the SV-1, wedge style and easily-tuned Ford small-block power…

A lot of his claims are dubious. Some statements show a lack of business wit (or a very disingenuous mind). In any case: run the other way. You don’t compete with a BMW 6 series with a $25,000 car. Because if your car was just as good, you could charge for just as much. Otherwise you’re competing with a Camry. It’s called: the market. BMWs are not made of more expensive metal or more refined plastics, yet, they cost more. They cost more because people are willing to pay more.

Plus there’s the thorny issue of intellectual property. As long as Chery is manufacturing in China for the Chinese market, they are untouchables – China not being totally openmarket nor WTO friendly. Once they touch the US soil, it’s a different set of rules. The few cars that I saw under the Chery flag has “derivative” styling. That is, an Infiniti copy, a maxima copy, a CRV copy. And that probably is the tip of the iceberg. I wonder how much content under the hood is “original”. Reverse-engineering is probably alot cheeper than engineering.

Add safety, regulation, emissions, import issues and no wonder it’s been delayed till ‘08 or ‘09.

Please stop holding your breath.

(Honda, on the other hand, LOVES CAFE, and would love to see it raised still further. But they are just about the only major automaker who doesn’t have a single V8!)

Besides which, price is only part of the equation when it comes to cars. Cars are a LTR, not a one-night-stand. A customer needs to have confidence that the company is going to be around for a while before they’ll lay down the long green, even at a discount price. Seems to me the right way to do this is to either piggyback onto a bigger company, using their already established dealer network, or else start small and humble and build a solid reputation before expanding.

Speaking of the dealers, Bricklin is now recruiting 250 of them to put up big bucks to get in on the ground floor. He claims that of the first 6 prospects pitched, 6 wrote checks and got on board. Not only will they get their own store, they’ll own a small piece of all the other stores and even get part ownership in the Chinese factory. And, since there will be few Visionary Vehicle locations – meaning large protected territories for dealers – customers will have the option of having their cars serviced at independent local shops chosen by the dealer. The dealer will get a piece of their action, too.

(From http://www.theautochannel.com/news/2005/03/19/016404.html)

He has backed down from this somewhat, now saying dealers can set up dealerships in vacant showrooms, but he still wants his showrooms separate from any other manufacturers’.

I did like the SV-1, AMC engine and all.

As I recall, the individual owners of the Bricklin SV-1 really love them.

I appreciate the personal stamp you see on cars from such a small builder…they have no cigarette lighter or ashtray, as Bricklin believed it was dangerous to smoke and drive. That’s something you won’t see nowadays, one man’s convictions built right into the vehicle.

After getting a grip on rational marketing methods for the USA, Daewoo was doing reasonably well and ready to import their tall-station wagon, the Tacuma (styled in Italy, as most of their cars were).

The Tacuma was a Matrix/Vibe sized car and would have been competition for Mazda 5. Then, GM, Suzuki and SAIC purchased most of Daewoo and yanked the rug from under Daewoo USA, refusing to sell them any vehicles or even spare parts. Daewoo also had upgraded versions of their cars in the wings, which ended up being sold as the Chevrolet Aveo (plus Optra and Epica in Canada), the Suzuki Reno, Forenza and Verona.

Not forgetting that Daewoo had a very high-profile corporate head (now in jail after doing a runner for a few years) who took many many chances and was brought low from two factors – greed and the 1997 Asian financial crisis which crippled one of the fastest growing car companies on earth – yes, Daewoo. (It had “planted” a high number of joint ventures and car factories world-wide in markets which have subsequently proved their thinking correct). Much of Daewoo was bought for pennies on the dollar, one of the best investments GM has made recently in fact.

I think when a start-up car import company has to resort to some kind of gimick such as a “high-profile personality” or selling cars through college students for free “buzz” then the end-result will inevitable.

Also, unfortunately and not to be personally insulting to Mr. Bricklin (who in fact has done well for himself – though many of his prior business venture investors may still have empty pockets) his past experiences in business have not been a success in the sense of making any of his investors money!

Another Chinese auto maker, Geely, may do better in the USA – kind of like the turtle and the hare all over again.

http://paultan.org/archives/2006/02/18/chery-qq-crash-test/
http://paultan.org/archives/2005/09/30/jiangling-landwind-x6-gets-zero-in-crash-test/