Chinese Automakers Face Hurdles in U.S. Market
Although it will be a few years before Chinese cars are selling in U.S. showrooms, their presence at the North American International Auto Show in Detroit is creating quite a stir.
Five Chinese automakers are represented — up from two last year, which sends a clear signal that China is setting its sights on the lucrative American market. In a couple of years, Americans might be able to get a good deal on a Grand Tiger, a Strip of Cloud or perhaps a Liebao.
"In a very few years' time, China is going to be the largest and richest economy in the world. We're going to slip gently into second place," says Bob Lutz, vice chairman of General Motors.
But Lutz says no one is panicking because U.S. automakers already have a huge presence in China, where they're selling cars and setting up joint ventures.
"We are an integral part of the Chinese automobile industry, so as China grows, we will benefit," Lutz says.
Also, Chinese automakers face some big hurdles before they can penetrate the U.S. market. With relatively cheap labor, they can produce affordable vehicles, but their cars lack many of the basic features and comforts that American consumers now demand.
Paul Eisenstein, publisher of TheCarConnection.com, says the Chinese face more serious challenges.
"We saw some tests out of Europe just a few months ago where the Europeans ran a crash test, and [the Chinese] car folded up like an accordion," Eisenstein says. "One of the comments made by an executive was, 'Well, we sell our cars to people who drive safely.' Well, I don't think that's going to fly or meet federal mandates in the U.S. or Europe."
That's why Mike Jackson, the president of Auto Nation, the largest chain of car dealerships in the U.S., announced in Detroit that he wouldn't sell Chinese cars — not yet, anyway.
The Chinese say they hope to be selling cars in the U.S. within two or three years, but they understand the challenge.
"We are not sure whether we can pass the qualification or safety test in the United States," says Waping Jong, the chief designer of Cheng Fung's new diesel SUV. "We have a lot of work to do with the qualification."
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