Chinese car brand Guangzhou Automobile Group’s showing at the North American International Auto Show made it pretty clear that the manufacturer wants to get into the U.S. market. But, with its earlier deadlines to do so having gone unmet, there is skepticism that it won’t happen by 2019. Is it really possible?
Well, sure, anything is possible. But GAC has a laundry list of obstacles to overcome if it wants to sell cars to Americans in earnest and the clock is ticking. For starters, politicians are starting to get a little testy when it comes to Chinese trade policies, and GAC now finds itself as a focal point on the issue. More importantly, the brand needs a clear-cut path to victory — and we’ve yet to hear one.
At this very moment, Chinese-based automaker GAC has a massive booth in the very center of the North American International Auto Show in Detroit. The company has expressed its intent to start importing its vehicles into the United States in 2019. However, 536 miles away (by car), Washington is bemoaning Chinese trade practices — a topic which might be extremely relevant for Guangzhou Automobile Group in the coming years.
On Wednesday, Democratic U.S. Senator Chuck Schumer and President Donald Trump separately criticized China’s trade policy. For automobiles, this translates into Chinese-built cars incurring a maximum 2.5 percent import tariff upon entering the United States, while U.S.-built cars sent East are hit with an average 25 percent tax.
It seems like we’ve been hearing about it forever — that fateful day when China surpasses the United States by every single metric imaginable and forces everyone to drive its cars. While that premonition has already come to pass in some respects, there’s still no overtly Chinese automobiles milling around on North American roads.
However, manufacturers from The People’s Republic have been looking westward for a decade. I can recall BYD Auto, along with other Chinese firms, having a booth in the basement of the North American International Auto Show way back in 2008. They weren’t there because they had nothing better to do — they were there to size up the competition and let America know they were coming. Of course, nothing happens overnight and Chinese automakers have been a little busy converting their domestic market into the world’s largest. But the time for westward expansion is fast approaching.
No Fixed Abode: How the Chinese Missed Their Window of Opportunity (but Will Come in Your Back Door Anyway)
There’s a Land Rover clone — or is it a Land Cruiser clone — coming our way. Built in a low-cost country where the principle of “just good enough” has held sway ever since the Communists took over, it’s cheap, rugged-looking, and certain to feed aggressively on the bottom of the SUV-buyer ocean. You might not like the idea of supporting an oppressive regime, and you might not like the idea of trusting your life to something that was slapped together in a hurry, but other people aren’t as smart and discerning as you are and they will ensure that the new product is a roaring success.
Oh, I’m not talking about the Trumpchi. I’m reading automotive history circa 2003. What, you don’t remember the CrossLander? Well, my friend, you are in for a treat — one that has a surprising amount of relevance to China’s entry to the American auto market.
With the return of two storied nameplates like the Ford GT and Acura NSX, it’s easy to understand why the only Chinese automaker with a display at the North American International Auto Show last month in Detroit, Guangzhou Automobile Group Co., didn’t get much attention. For the past decade or so, a number of Chinese car companies have had displays and press conferences at the media previews to the Detroit show, some of them with plans to export cars to North America, but so far little or nothing of substance has come to fruition from those plans. Whether or not they end up selling Chinese cars here, it does make a little bit of sense to take advantage of the presence at the NAIAS of thousands of members of the international press. That’s probably why GAC used the 2015 NAIAS to have the world premiere of their GS4 compact SUV. In addition to the GS4, which appears to be more of a car based crossover than a serious SUV, GAC also showed their GA6 sedan (which they say was developed for “the higher end market”) and the WITSTAR concept (that included it’s own built in aquarium between the back seats).
China’s Ministry of Public Security is reporting that China’s vehicle fleet expanded 14 percent last year from 2012, to 137 million vehicles. In ten years, China’s vehicle population has grown by 570%. The total includes 2.5 million buses, 20.2 million trucks and 14.4 microvans. The remaining 100 million vehicles are sedans, multipurpose vehicles and SUVs. Thirty one Chinese cities have vehicle fleets exceeding 1 million vehicles and eight municipalities have more than 2 million cars and trucks registered: Beijing, Tianjin, Chengdu, Shenzhen, Shanghai, Guangzhou, Suzhou and Hangzhou.
China's Geely Will Export Vehicles Jointly Developed With Volvo to North America. U.S. Dealers & Volvo Sales Arm Want V60, V40 Wagons
Geely founder and chairman, Li Shufu
Last week we reported the Geely and Volvo, which is owned by the Chinese car company, will be jointly developing cars and there was speculation if those cars would be sold in America. Now Bloomberg reports that some of those cars will indeed be exported to the United States. That would achieve the goal of Geely chairman Li Shufu that he set when Geely first showed product at the 2006 NAIAS in Detroit. At the same time, Volvo dealers in the U.S. and the company’s American sales unit have been trying to get more Swedish made Volvos shipped here.
Gui Shengyue, current CEO of Geely, said in an interview last week, “Our acquisition of Volvo enhanced our image and overseas consumers are seeing us as an international company. Our deliveries in U.S. and Europe will be banking on those jointly developed models.”
MG, now owned by Chinese auto maker SAIC, is apparently gunning for Kia and beyond. But despite their lofty ambitions, MG hasn’t made much headway in the automotive world.
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