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Chinese Carmakers Head West

Changfeng's latest SUV -- called Liebao ("Cheetah")
by Staff Writers
Detroit (AFP) Jan 15, 2007
Doubts about the quality and reliability of their belching vehicles are not deterring Chinese carmakers from dreaming big with plans to take on the US market. At the 2007 Detroit auto show, the Changfeng Group said Monday it plans to start selling its sport-utility vehicles (SUVs) and pickup trucks in the world's biggest car market within two years.

In the meantime, DaimlerChrysler's US arm is joining forces with China's Chery Automotive Co. to build small cars in China that could be sold in the United States and around the world within two years.

And ZX Auto hopes to become the first Chinese carmaker to enter the United States, from mid-2008, according to the company's US importer, Chamco Auto.

The Chinese companies are taking a leaf from the copybooks of auto groups from Japan, which conquered the United States years ago, and South Korean ones like Hyundai and Kia, which are enjoying record-breaking sales.

Steve Wilhite, chief operating officer of Hyundai Motor America, told AFP the auto industry was broadening to encompass "really bright designers, engineers and manufacturers" in China and elsewhere.

"So I think the Chinese will add just another level of competitive pressure and opportunity," he said. "I think they'll be here, and I think they'll do well."

Len Hunt, the chief US operating officer at Hyundai's Kia Motors affiliate, said the prospects for Chinese carmakers in the United States are "probably pretty good."

"This industry is like being on an escalator," he said.

"For Kia and some other Korean manufacturers, we came in on value and have now started to build up our brands, and so we're now moving up that escalator. It leaves a space (lower down the value chain)."

But before winning over finicky US buyers, and regulators, Chinese manufacturers will have to contend with a reputation for making tinny cars that breathe out noxious clouds and fall apart in no time.

"If Chinese automakers want to enter the US auto market, they must be able to produce autos that reach American standards," said Jia Xinguang, analyst at the China Automotive Industry Consulting and Development Corp. in Beijing.

But Changfeng could be a good bet owing to its partnership with Japan's Mitsubishi Motors, which "managed to get a piece of the American market a long time ago," he said.

Changfeng chairman Li Jianxin insisted that his company's vehicles are good enough for the fiercely competitive US market.

"From the beginning, we have had quality as our number one priority," he said after unveiling Changfeng's latest SUV -- called Liebao ("Cheetah") -- and a new pickup truck.

Changfeng became only the second Chinese automaker to exhibit in the main Detroit salon after the much larger Geely Automobile Co. made a splash with its debut in the Motor City last year.

After Geely and Changfeng, ZX Auto planned to display its own SUV and pickup truck in a hotel across from the main Detroit show.

Chamco Auto chairman Bill Pollack said both ZX vehicles would retail for just over 13,000 dollars, at least 20 percent below any competitor.

"The American consumer knows that, as opposed to buying Chinese dresses or lawnmowers, there are extremely strict rules on quality here," he said.

"Plus the Chinese government is being very clever by limiting exports to just a few companies. They know that China's image is on the line."

Starting in March, Beijing plans to add autos to its list of products that require export licenses. The move will prevent "cut-throat competition" among Chinese automakers, according to the official Xinhua news agency.

Li said the licensing regime would have "no effect" on Changfeng's plans.

Source: Agence France-Presse

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