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Discussion Starter · #1 ·
http://www.signonsandiego.com/news/business/20070423-0024-autoshow-brilliance-usa.html

Brilliance plans U.S. sales as early as 2007

By Fang Yan
REUTERS

12:24 a.m. April 23, 2007

SHANGHAI – Chinese automaker Shenyang Brilliance Jinbei plans to ship its first sedans to the United States as early as this year, potentially making it China's first home-grown carmaker to crack the world's largest vehicle market.

Brilliance Jinbei, a unit of Brilliance China Automotive Holdings, last year became the first of its Chinese peers to secure a major sales deal in Europe, beginning with its BS6 mid-ranged sedan priced at 19,000 to 23,000 euros ($31,270).

“We are making preparations currently and hope to ship the first batch of BS6s to the United States late this year or in early 2008,” Brilliance Jinbei President Zhigang Liu told Reuters on the sidelines of the Shanghai auto show late on Sunday.

The initial sales target and other details have yet to be worked out, he said.

Brilliance, BMW's China partner, is among a growing army of ambitious Chinese auto manufacturers, such as Geely Automobile Holdings Ltd., that aim to emulate the global success of Toyota Motor Corp.

Brilliance plans to sell 158,000 sedans to Europe over the next five years, including the BS6, following up with a coupe, a smaller sedan, a compact car and a sport utility vehicle by 2010.

Chery Automobile Co., which has made inroads into emerging markets in recent years, struck a deal with DaimlerChrysler in late 2006 to make Chrysler-branded models for Europe and other markets.

PHASED EXPANSION

Previously little-known Nanjing Automotive Group, which stunned the industry in 2005 by snapping up major assets of failed MG Rover for little more than $100 million, unveiled in March the first China-made MG cars. It plans to start selling them in British Commonwealth countries in the second half.

If these initial steps proceed smoothly, China's vehicle makers could become a force to be reckoned with in the global market, although they still rely heavily on low pricing to attract customers.

Brilliance, which also makes BMWs and Minis in a venture in northeast China, is building a new plant for its own-brand cars that will double its capacity of 150,000 units.

The group sold 200,000 vehicles, including BMW brands, in 2006 and aims to boost that figure to 300,000 units this year and to 500,000 by 2015, Liu said.

“We are restrained by capacity already but we have decided to avoid ramping up too quickly. The best strategy is to grow with the market,” he said.

He added that Brilliance, having spent at least 10 billion yuan on research and development for its sedans so far, would follow up by investing a similar amount in the next five years.

SAIC Motor Corp., a Chinese partner of both General Motors and Volkswagen AG, is spending $1.71 billion to develop its own brands.

SAIC, the country's biggest car maker, last year rolled out its first brand of its own, the Roewe, based on acquired technology, and unveiled two more models – the Roewe W2 and a Shanghai brand fuel-cell car – at the auto show.

Liu did not rule out the possibility that Brilliance would acquire competing brands, domestic or foreign, when the opportunity arises.

“Some have already made big strides down that road and we would do likewise when we grow bigger,” he said.

($1-.7356 Euro; $1-7.726 Yuan)
Zhonghua BS6 Chinese Luxury Sedan.

- Gets two stars in NHIST crash test.
- Auto-mag reviewers blast it for being so 90s.
- Fails to pass California emissions.

Zhonghua BS6 is going to haunt all Chinese brands for years, just like how Landwind tarnished Chinese brands in Europe with its 0 EuroNCAP score...
 

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Discussion Starter · #10 ·
hazik said:
I think this car doesn't look that bad. If it's priced the same as an Accord or Camry they'll sell.
So you don't understand American drivers.

I say Zhonghua might sell a few thousands if it is priced at $13,000 with a full leather interior, automatic transmission, etc and comes with a 100K warranty. Other than that buyers will pass.
 

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Discussion Starter · #15 · (Edited)
My guess is the BS6 will sell in the US, fully loaded with leather, moonroof, auto, etc. etc., for less than $20K, along with 10 year warranties, free road side assistance, and free full maintenance.
Suzuki Verona(Aka Daewoo Magnus) had exactly all that, plus a six banger for $19,999 and it flopped.

On the other hand, Suzuki Forenza(Daewoo Lacetti) is the best selling Suzuki accounting for half of Suzuki's US sales because it is priced at $14,000 loaded.

So that should give you an idea of what kind of a price Brilliance could charge.
 

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Discussion Starter · #17 ·
BringIt said:
Suzuki had these cars? I almost forgot about them... can't remember if I ever seen an ad or commercial on these cars. Well, since Suzuki no longer sell any mid-size or bigger sedans, that leaves a big hole for Brilliance :thumb:
Nobody's gonna pay $20K for a Chinese brand car. The market doesn't exist.

I propose Brilliance (or any other Chinese car company) to throw in free full maintenance for the duration of the warranty.
And go bankrupt paying for repairs in the process. Not even BMW would keep the free maintenance program citing the cost.

Based on the sales history of Daewoos, the maximum that US drivers will pay for a Non-(Japanse/Hyundai) Asian car is $14,000.
 

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Discussion Starter · #18 ·
Based on what I have seen so far, Brilliance has a pricing problem that prevents it from $14,000 price bracket. Throw in the huge warranty cost from poor quality and why Brilliance would make a relatively quickly exit from the US market.
 

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Discussion Starter · #31 ·
edge said:
The only reason why Korean cars completely dominant their domestic market is because the Korean govt. SHUTS OFF foreign competition and foreign brands. Maybe in recent years, they have allowed a trickle of foreign brands into the country, but Korea is nowhere as open as China is when it comes to trade and investment.
Actually there was a news article on Chinese newspapers about 10 Chinese misconception of the world early this year in hopes of broadening average Chinese's understanding of the outside of the world, and the very misconception abut Korean auto market was discussed.

Obviously, Korean auto indutry is much more wide open to foreigners than China, 4 out of 5 auto manufacturers in Korea are foreign owned(GM, Renault, SAIC, and Tata), the import tariff is only 10%(same as Europe), and there is no restriction on foreign ownership of automobile and auto parts makers. Even worse, turn on the TV and nobody drives around in Korean brand cars anymore.

The reason foreign brands do poorly against Hyundai/Kia is that their offerings are not competitive. Only two mass-market auto manufacturers in the world put out higher quality vehicles than Hyundai does for the moment, Toyota and Honda. But these two don't want to price compete in Korea, so these customers really don't have a choice. You cannot find a foreign brand vehicle with better quality and the tight service network at a price premium of say 15%, so they are back to Hyundai/Kia showroom every time.

Tata and Briliance tried to sell Indica and Zhonghua, but they gave up after figuring out that they couldn't undercut Hyundai's prices by more than $1000~$2000.
 

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Discussion Starter · #33 ·
who does Tata own?
Daewoo's mid-heavy truck/tractor business.

Tata does have a distribution network in Korea and this is why Tata tried to distribute Indica in Korea, but gave up because Indica was not competitive enough.

The reason for Brilliance's North Korean factory is not to serve North Korea, but to ship BS4 and BS6 to Korea since anything made in North Korea is considered domestically manufactured in the south and are exempt from import tariff. Even with this, Brilliance's calculations showed they still couldn't compete with present models.
 

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Discussion Starter · #41 ·
KING_OF_HILL said:
There is nothing high quality about hundai/kie, they are mediocre at the best.
I am basing this on the Consumer Report's latest long term reliability report.

Cheery said:
I think the culture may have played a big part here. Heard that in Korea, seniority is such a big deal that you should not out-drive your boss, or anyone with a higher position in your work, etc. For example, when your supervisor drives a Sonata, you better get yourself a Elantra or something like that.
It has nothing to do with culture and everything to do with economics. Hard to afford a bigger vehicle on a salaryman's salary with a punitive auto taxation system(the government really really doesn't want you to own a car, but rather use public transportation system or drive a mini car to save on gas). Those in higher rank either has the company issuing the company car or subsidizing its ownership cost, the lower ranking workers don't get that.
 

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Discussion Starter · #49 ·
Geotpf said:
Oh, and for Hyundai's reliability rating, the current Consumer Reports has the Hyundai nameplate in seventh place, overall, in predicted reliability for new cars. The top six companies are all Toyota or Honda affliates.
That's why I said there are only two automobile companies that produce more reliable cars that Hyundai does on earth, Toyota and Honda.
 
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