What Happened To the Chinese Automakers Wanting a Piece of the U.S. Market?
American automakers can usually count on selling just below 3 million vehicle sales in China every year. While that figure includes the caveat that the Chinese Communist Party requires foreign manufacturers to partner up with established local companies, it remains substantially larger than the number of cars Chinese brands manage to move in the United States per annum — which is effectively zero.
From BYD to Zoyte, just about every large Chinese manufacturer has issued a deluge of promises about breaking into our market over the last decade — including most of the names we’ll be mentioning below. Consider this sort of the “Where Are They Now?” of evergreen automotive content about regional disparities. Because very little has moved in regard to China’s involvement with the North American auto market and the current geopolitical climate doesn’t make us think that’s likely to change anytime soon.
But it hasn’t been for a lack of trying.
Zotye Automobile International was last recruiting U.S. dealers in 2018 and even had a couple of importers on its payroll to help it figure out how to start shipping vehicles to the West. It even had a distributor set up in California with HAAH Automotive Holdings helping to build its sales network. Everything looked great and Zotye USA was supposedly months away from opening its first batch of franchised dealers, all of which had been right-sized to cater to a small Chinese brand with a highly limited lineup.
The company’s first entrant for the North American market was to be the T600 (above) — which happened to be a doppelganger of the Volkswagen Touareg and should not be confused with the similarly named Kenworth Class 8 truck. Retailing in Asia for as much as a secondhand Honda CR-V in good condition, the T600 looked as though it could take the credit risk segment by storm and was supposed to arrive in 2020. The brand had also stated that is had been making major strides in electrification in 2011, vowing to deliver one to the U.S. by 2015. But neither showed up.
What happened instead was Zoyte Autos’ controlling shareholder declaring bankruptcy in September of last year and Ford Motor Co. dissolving its planned EV partnership with the brand in China. However Blue Oval claimed the decision was made due to CCP government policies having changed to a degree that it no longer felt confident it could adhere to regulatory measures under the existing plan.
HAAH Automotive Holdings also had plans to build Chery’s Exeed XT SUV (below) using a new brand name that didn’t so much like Chevy. Despite also appearing to have fallen through, a revised strategy has the model coming to the United States as the Vantas XT sometime this year. Models will be shipped from China as knock-down kits, with about half the loose components allegedly coming from U.S. suppliers.
Since Chery’s launch date has been pushed back, we suppose there’s a chance it could hit the target. But we’ve heard nothing about where these vehicles will be assembled and that kind of stuff usually takes quite a bit of time. Even though the Exeed/Vantas did seem to be capable of throwing the compact crossover segment an interesting curveball, we’re not under any illusions that’s going to happen within the next 12 months. Still, one has to admire the brand for bothering to set hard targets for itself.
Though my favorite Chinese automaker vying to get into the United States has to be Guangzhou Automobile Group, perhaps better known to you as GAC. Unlike its contemporaries, GAC had set up a special division to research how to make its products work for the American market and you could those efforts manifesting in the real world. It even had booths rivaling the size of many established manufactures at many of our biggest automotive trade shows — back when we still had the opportunity to attend such events.
While its Chinese staff was extremely particular with the branding and acted highly annoyed whenever someone said “Gak Motors,” I also watched them survey just about every person that walked into their booth. While the brunt of their products were a rung or two down from what seemed acceptable and we mocked the exhaust finishers attached to nothing, their dedication to consumer engagement was truly enviable and made the other manufacturers look lazy. It was clear that GAC had not come to play and was clearly serious about selling in the U.S.
At the 2018 North American International Auto Show, held in Detroit, the staff informed us that the company intended to launch their large Trumpchi GS8 utility (above) here. Scheduled for 2019, the SUV would represent GAC achieving a goal it had held for years and it quickly went to work meeting with dealers at the National Automobile Dealers Association convention. However, tensions created by the Sino-American trade war forced the automaker to delay some of its plans, with it remaining confident that we would see the GS8 (and its “Trumpchi” brand) arrive by 2020… back when GAC cared.
We’re obviously still waiting and I think that’s ultimately what we should take away from all of this. Chinese brands aren’t universally up to the challenge of delivering the kind of vehicles Americans are accustomed to. Most of these SUVs are already derivative in their designs and too meek in terms of the powertrains and features being offered (though not always by that much, if we’re to be objective). Consumers who just want an affordable crossover would probably be well served by a GAC or Zoyte product. But those accustomed to more of everything might find them lacking in too many areas to make the almost assuredly lower MSRPs feel sensible.
You’re probably wondering how that’s any different from what happened with Japan or Korea, both of which broke into our market selling products far below the typical size and engine displacement at prices well under the typical exchange rate. While there are plenty of similarities, Japanese and Korean automobiles arrived long after their relationship with the United States had bottomed out completely (war). Meanwhile, the Chinese opinion of the West continues to degrade, and survey data here would suggest the same thing has been happening on our end. Throw in the trade war and China’s extremely vocal commitment to expanding its own global influence and it’s genuinely difficult to imagine there being enough enthusiasm to see Chinese cars being sold in sufficient numbers to warrant the international commitment.
Then again, there are other ways of doing business here.
Faraday Future started operating in 2014, stationed in California with one of the most confusing ownership structures we’ve ever come across. Clearly inspired by Tesla and a slew of Chinese EV startups — including LeEco, which was also founded by Jia Yueting — the company found itself biting off far more than it could chew and has been habitually in debt ever since. Despite continued work on its FF91 crossover (above), the company has repeatedly broken its production promises and now looks to be dead in the water while investors play hot potato with whatever assets remain.
Many would argue that Geely (or perhaps General Motors, if they wanted to be cute) is the first and only Chinese automaker to break into North America (honorable mention: Wanxiang/Karma). While all of the brands mentioned above have repeatedly pushed back deadlines for a U.S. launch, Geely just bought Volvo Cars in 2010. But it also tried the traditional route. Back in 2006, the Chinese brand was in Detroit showing off a compact it wanted to export to the U.S.
While its official push in the market is now most likely to come by way of Lynk & Co — a brand making headway in Europe as you read this and was supposed to launch in the U.S. this year — owning Volvo technically gives the manufacturer an incredibly important in with North America. It’s not quite the same as selling Chinese exports, since Volvo’s operations remain headquartered in Sweden. But the last couple of years showed Geely rolling back some of the European brand’s autonomy and even pitching the concept of a full merger (though that idea was abandoned in February). Regional headaches aside, it’s not a bad place to be with the Chinese auto market having recently plateaued.
Despite there being plenty more people in China that could buy cars, the economic situation has made it difficult for rural areas to continue accruing the necessary wealth. Roughly half of the nation’s urbanites have at least one vehicle per household but those living in the boonies only have a 25 percent ownership rate. There’s not much money in chasing those rural customers down, so manufacturers are looking elsewhere. For now, it seems most of China’s sales gains are happening in the developing world — even though the country is still navigating how best to improve its diminutive market share in Europe and break into North America, assuming that’s still an option. But the COVID era appeared to indicate China losing some amount of interest in the latter market, making us wonder if the long-term strategy has changed or if this is just another postponement of the planned industrial push westward.
[Images: Destinyweddingstudio/Shutterstock, Volha-Hanna Kanashyts/Shutterstock, VanderWolf Images/Shutterstock, GAC, Faraday Future, Geely]
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- Tassos Chinese owned Vollvo-Geely must have the best PR department of all automakers. A TINY maker with only 0.5-0.8% market share in the US, it is in the news every day.I have lost count how many different models Volvo has, and it is shocking how FEW of each miserable one it sells in the US market.Approximately, it sells as many units (TOTAL) as is the total number of loser models it offers.
- ToolGuy Seems pretty reasonable to me. (Sorry)
- Luke42 When I moved from Virginia to Illinois, the lack of vehicle safety inspections was a big deal to me. I thought it would be a big change.However, nobody drives around in an unsafe car when they have the money to get their car fixed and driving safely.Also, Virginia's inspection regimine only meant that a car was safe to drive one day a year.Having lived with and without automotive safety inspections, my confusion is that they don't really matter that much.What does matter is preventing poverty in your state, and Illinois' generally pro-union political climate does more for automotive safety (by ensuring fair wages for tradespeople) than ticketing poor people for not having enough money to maintain their cars.
- ToolGuy When you are pulled over for speeding, whether you are given a ticket or not should depend on how attractive you are.Source: My sister 😉
- Kcflyer What Toyota needs is a true full size body on frame suv to compete with the Expedition and Suburban and their badge engineered brethren. The new sequoia and LX are too compromised in capacity by their off road capabilities that most buyers will never use.
The only Chinese brand making any headway in Europe seems to be MG. Sales in the U.K. at least are growing fast, reminiscent of the success Kia had in its early years. They are also accelerating quickly in India. It may just turn out that China’s most successful brand is er ‘British’
Their committee designed cars and RVs (no one mentions Chinese RVs) deserve hefty tariffs in the same way they slap arbitrary tariffs on various Australian goods. Buying Chinese means you’re directly supporting an ugly totalitarian regime.