BEIJING, Jan.12 -- Geely Automobile Holdings Ltd., China's first car maker to exhibit at the Detroit motor show, said its Free Cruiser compact car is undergoing U.S. road and emission tests and should go on sale for less than US$10,000 by 2008.
"This is like a first step in a long march," said Li Shufu, Geely's chairman. "This is one step for us to bring our car to the world."
Geely has set a goal of selling 25,000 to 50,000 cars a year in the United States starting in 2008, said John Harmer vice president and chief operating officer of its U.S. unit. The Free Cruiser compact car, called 7151CK outside China, seats five passengers and is about the size of a Honda Civic.
A front-window display at the biggest industry show of the world's largest vehicle market raises the brand's profile among customers and dealers. Geely, based in eastern Zhejiang Province, follows Chery Automobile Co. and Chang'an Automobile Co. in trying to sell cars overseas, repeating the export strategy that helped Toyota Motor Corp. and Hyundai Motor Co. grow into two of the world's largest assemblers.
"They are saying: ‘Well, if we stay at home, margins will decline, and we have to know what it takes to compete globally, so let's get out there,'" said Mike Dunne, president of Automotive Resources Asia Ltd., in Shanghai. "Geely and Chery are out there way ahead of everybody else" in pushing for exports, he said.
Chery and Geely were China's sixth and seventh-largest by sales volume in 2004.
"Chinese carmakers are going on the same path as Japanese and South Korean assemblers by using their cheap costs and low prices to attract customers," said Yale Zhang, a CSM Asia Corp. analyst in Shanghai. "They will gradually enhance their quality, build their brand image and introduce high-end products."
Geely, profitable even when it sells vehicles at less than 70,000 yuan (US$8,600) each, is taking advantage of wages that are 5 percent of Detroit's average pay to sell low-priced models. The company pays workers US$3.50 an hour for wages and benefits, Geely's Harmer said. By contrast, members of the United Auto Workers (UAW) union at General Motors Corp. (GM) earn US$64 an hour.
"The UAW and GM may not like it, but we're in a global economy," Harmer said. "The American consumer needs a high quality product that won't put them in debt for seven years, and that's what we're going to give them."
Geely switched to assembling cars in 2000 after more than a decade of making refrigerator compressors, selling 5,000 cars overseas in 2004 out of a capacity of 200,000 units.
It's the largest Chinese automaker that isn't affiliated with the government. Geely specializes in low-price models, such as the 1.3-liter-engine Merrie with a base price of 33,000 yuan.
Geely is aiming to export 1.3 million cars by 2015 out of 2 million it's aiming to produce, or about 2 percent of the estimated global market share. Li said. Total sales may rise to 200,000 units this year from 140,000 last year, he said.