Tuesday, March 21, 2006

Geely Automobile on pace for US vehicle launch

BEIJING, March 20 -- Domestic automaker Geely Automobile Holdings Ltd. is on schedule to market vehicles in the United States by early fall 2008, despite potential difficulties passing strict U.S. testing standards, Geely's top U.S. official said.

Geely USA chief operating officer John L. Harmer said Friday the automaker was "pleasantly surprised at how well we did" in preliminary efforts to meet U.S. federal standards.

Harmer, speaking at a Society of Automotive Analysts conference in Detroit, said the automaker's cars have undergone preliminary quality, emissions and safety tests, but he declined to disclose the car's actual performance. He said Geely hasn't begun the official testing that is required by the U.S. National Highway Transportation Safety Administration and the Environmental Protection Agency.

Two weeks ago, news reports emerged saying Geely had failed U.S. procedures. The automaker denied that, but the news still raises speculation that Geely will have a tough time meeting its 2008 U.S. target. U.S. federal emissions and crash standards can force automakers into costly and lengthy testing procedures.

Harmer acknowledged Geely's current products do not meet U.S. requirements, but he said the automaker already is exporting vehicles to Middle East and Eastern European markets where there are "no requirements" at all. Harmer said Geely, one of the most successful Chinese automakers selling in China, has begun setting benchmarks for the generation of cars it eventually will export to the United States. However, the company is still establishing a "process" for correcting its cars' "deficiencies" in order to meet U.S. standards, he said.

Harmer said Geely cars will be very, very basic, but will be "worthy" of meeting U.S. customer expectations. He said the cars will retail in the United States for about US$7,500.

Geely made a splash in January when it showed off a small sedan at the North American Auto Show in Detroit. Despite the onslaught of new products from major automakers, Geely's small car attracted a lot of attention, Harmer said.

Geely has conducted market research on the product it showed at the auto show, Harmer said. He said a quarter of people surveyed felt the quality of a Chinese car is the top concern that could stop them from actually buying a Geely.

Geely is racing with at least one other Chinese automaker, Chery Automobile Co., to break into the U.S. market. Chery's effort is led by longtime U.S. auto executive Malcolm Bricklin, who has delayed his launch plans amid difficulty signing up dealers and other hurdles.

"We don't care who's first," Harmer said. Instead, Geely cares about developing a car U.S. consumers will embrace and the Chinese Government will clear for export, Harmer said. He insisted Geely "will not be embarrassed" by a poorly executed export.

Geely has talked to more than 200 U.S. dealers or interested entrepreneurs who have approached the company about selling its vehicles. Harmer said Geely is close to establishing West Coast and East Coast ports, after which the company will start mapping its retail network.

Geely also is initiating talks with auto-parts suppliers with U.S. operations about sourcing parts to China for U.S.-bound automobiles.



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