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Chinese Cars Inch Closer to U.S.
Source : New Yorker Times [Posted on Jan 19,2009 at 9:31]

AT the Brilliance Jinbei Automobile display in Cobo Center on Monday, journalists and guests were served that quintessential American form of refreshment, Coca-Cola ?in 6-ounce glass bottles.

The Chinese are keen observers of American tastes. The country’s automakers can be expected to cater to those tastes while working to enter the United States market. But Chinese cars are still not here, despite promises from some of the companies at last year’s Detroit show that their arrival was imminent.

Some of those carmakers are already out of business; others are struggling to survive. Analysts said that while the remaining companies still had a long way to go in producing a car that met American tastes and safety standards, they should not be underestimated.

“The Chinese will get here, eventually,?said George Peterson, an industry analyst and president of AutoPacific, in an e-mail message. “They are fast learners, fast movers and good implementers when they have accurate blueprints. But right now they are a generation away from having competitive vehicles, and it appears most of them understand that.?

The latest indication of how far away the Chinese threat remains was both on display, and not on display, here. Gone from Detroit this year were previous Chinese exhibitors like Chamco, the short-lived American distributor for Hebei Zhongxing Automobiles, Geely and Changfeng.

And the two Chinese automakers who were in Detroit this year (on the show’s main floor for the first time, partly as a result of other automakers dropping out), Brilliance and BYD Auto, seemed farther away than their previous forecasts for introducing cars in America. Three years ago, Brilliance had announced a goal of 2009 for beginning sales in the United States.

So why was Brilliance showing four of its newest models in Detroit? Because the company still wants to enter the United States and says it has the expertise to make it happen. “In a joint venture with BMW, they assemble 3 Series and 5 Series sedans in China; they assemble Toyotas; they assemble four different engine lines,?said Jack Gerken, a spokesman for Brilliance at the show. “It’s just a tough market right now, both here and back home in China.?/P>

He Guohua, vice chairman of Brilliance, added: “We are in Detroit because it is the perfect opportunity for us to measure ourselves against international standards.?/P>

So far, that has been a sobering experience.

“We realized we need to do more work on our cars to reach America,?Mr. He said. Brilliance will redesign its lineup with United States crash and emissions requirements in mind.

“The one weakness Chinese automakers appear to have is that they don’t listen to consumers very well,?Mr. Peterson said. “They don’t understand how really important things like safety, reliability and durability are.?/P>

Over all, the Chinese domestic auto market has entered a turbulent period of retrenchment, consolidation and contraction.

Survival is now in doubt for Chery Automobile, which previously walked away from agreements with both Chrysler and the entrepreneur Malcolm Bricklin to build cars for America. Chery has announced layoffs, pay cuts and a freeze of development for some new models.

Another large Chinese automaker, the Shanghai Automotive Industry Corporation, a strategic partner with General Motors, is suffering from its 2004 acquisition of a controlling stake in South Korea’s Ssangyong Motor Company, which just filed for bankruptcy protection, and its 2007 merger with the troubled Nanjing Motor Company. Shanghai Automotive has rebuffed advances from G.M. to buy Saturn and Hummer.

Though environmental sustainability is far down the list of concerns for Chinese automakers, BYD Auto is trying to find a niche in the industry by being the first to put mass-produced plug-in hybrids on the road. BYD started selling its F3DM in China last month.

Some reviews of the car have not been kind, and the company answers criticisms of the car’s steering, motor integration and braking with concessions that the car might have been offered for sale prematurely, just to gain bragging rights for beating other automakers, including G.M. with its Chevrolet Volt, to market.

But BYD, buoyed by a $230 million investment in September from Warren Buffett, brought the F3DM and two electric prototypes to Detroit and said the vehicles would be on sale in the United States by 2011.

“We are committed to a green future for our planet,?said Wang Chuanfu, chairman of BYD. “We have the ability, the capability and the desire to be a significant part of the solution.?/P>

Mr. Wang also declared BYD Auto would be the world’s No. 1 automaker by 2025.

“The Americans cannot relax,?Mr. Peterson said. “But they can watch the Chinese closely and be prepared for when they do enter the market. There likely will be a couple of forays that will fail, such as Bricklin and Chamco, but then one Chinese company will land and establish a beachhead. Then, inexorably, we’ll begin seeing more and more Chinese-made vehicles on the road.?/P>

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