Chinese Cars in the U.S.?

Ten years ago, no one would have thought that the Chinese would be making cars for export but in September of 2002 Chinese cars were shown for the first time at the Frankfurt Auto Show. Visually, the cars were pretty rough, reminding customers of the first South Korean cars. The Chinese know they have a ways to go before they can compete in the international market place but they are willing to give it a start. The Landwin, an SUV made by a unit of Jianling Motors is expected to go on sale in Europe for about $21,000, about one half the price of its nearest rival. There is also a midsize sedan and sports car made by Geely Automotive and the Zhonghua sedan made by Brilliance China Automotive Holdings which has a joint venture partnership with BMW.

Arizona car dealer David Shelburg wants to establish a network of 100 dealers to sell Chinese cars. However, he has a pretty bad track record. A few years ago, he sold franchises in Texas but never produced any cars for his franchises. The state of Texas has banned him from doing business in that state. However, he says this time will be different and that he will sell Chinese cars in America.

Chinese Chery Auto Company and entrepeneur Malcom Bricklin plan to sell 250,00 Chinese made SUVs, sedans, and sports coups starting in 2007. The SUV will sell for $15,000. J.D. Powers says that the Chery has 374 problems per 100 cars compared to 118 per 100 cars made in the U.S.

The Chinese themselves do not expect to play a major role in foreign markets for about ten more years. They feel they need to learn more about doing business in this market and know they need to improve the quality of their cars. Ironically, their own autoworkers, who earn about $2.00 an hour, make it rather expensive for the cars to be made in China. The Chinese already have factories in Egypt, Viet Nam, and Turkey and plan to build more plants in Viet Nam plus Pakistan, Venezuela, and North Africa. In 2005, the Chinese exported 3.5 billion dollars in cars, up 62.2% from a year earlier. It seems inevitable that the Chinese will become major players in the international car market.

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