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Billionaire George Soros is offering Chery $200 million to produce Chinese vehicles

"China's New Heavy Hitter
Billionaire George Soros is offering Chery $200 million to produce Chinese vehicles for the U.S. Where does that leave Bricklin?

By ALYSHA WEBB AND GAIL KACHADOURIAN | AUTOMOTIVE NEWS

AutoWeek | Published 06/14/06, 4:48 pm et


Billionaire investor George Soros wants to be an automaker.

He is preparing to invest $200 million in a joint venture with China's Chery Automobile Co. to produce vehicles and distribute them in the United States, say sources at Chery and elsewhere in the industry.

The big question: Will the New York investor push entrepreneur Malcolm Bricklin from main partner with Chery to a subordinate role?

Bricklin, reached in his New York office last week, was tight-lipped about the situation. He confirmed that an investor, whom he refused to name, has committed $200 million to Visionary Vehicles LLC, which Bricklin established to form a joint venture with Chery and import cars to the United States.

Asked whether the investor is Soros, he said, "No comment."

Bricklin also declined to indicate whether the investor would gain control of Visionary Vehicles. He said the joint-venture agreement between Chery and Visionary Vehicles "is being finalized as we speak."

Soros and Chery declined comment last week.

Soros, 75, built a fortune spotting investment opportunities overseas. He also is well known for his liberal politics and philanthropy.

Soros' $200 million is in escrow and not yet available to the joint venture, sources say. The billionaire's investment was arranged by Atlantic-Pacific Capital Inc., an investment bank in Greenwich, Conn.

Any agreement would have to be approved by the Chinese government. The government is expected to support the joint venture; Beijing has steadfastly supported Chery's export plans.

It is not clear what role Bricklin would play if Soros and Chery strike a deal. Two sources say Bricklin's role would be reduced.

Asked what role he would play under the agreement, Bricklin's reply left room for interpretation: "I believe I will be doing exactly the same thing I've been doing since the beginning."

Bricklin announced his plans to import Chery vehicles in 2004. He since has been recruiting dealers. He says he has signed about 50, but his staff will not release the complete list.

Bricklin, a skilled salesman, has had a long career starting auto importers in the United States. He successfully launched Subaru here in 1968. His best-known failure was Yugo America Inc., which died in 1992.

Chery, which sold 189,000 cars last year, is China's largest fully domestic carmaker. By comparison, Shanghai General Motors, a joint venture between GM and Shanghai Automotive Industry Corp., sold 325,000 vehicles.

Chery, based in the central China province of Anhui, is owned by the local government. Last year Chery exported 18,000 units to developing countries such as Egypt and Malaysia, making it China's largest car exporter.

Chery assembles cars in Iran and recently signed an agreement to assemble cars in Russia.

Bricklin had predicted Visionary Vehicles would start exporting cars to the United States in 2007. Chery sources say a more likely date is 2009.

Soros was born in Budapest, Hungary. After earning a degree at the London School of Economics, he moved to the United States in 1956 at age 26.

He started an international investment fund and accumulated a fortune estimated at $7 billion in 2004. He is chairman of Soros Fund Management LLC."


- http://www.autoweek.com/apps/pbcs.dll/article?AID=/20060616/FREE/60614009/1041/TOC01ARCHIVE
 

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unprecedented entry

What is new here realihate, is the path of entry into the US market, as I think you have mentioned somewhere else on this forum.
No foreign car maker has ever tried to enter this market with the heavy baggage of such a high profile middleman. And none has tried to enter with the even heavier baggage of the partisan politics that Soros is associated with.
Yeah, there's always gonna be a bargain basement buyer available, as was the case with the Yugo and Pony, but under these circumstances it'll be a tough row to hoe for Chery.
 

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Chery Automobile cruises NorthAmericas way

By Judi McLeod
Tuesday, June 20, 2006

New York-based Visionary Vehicles hasn’t come up with a moniker for the `Chery’ vehicles with which Maurice Strong and George Soros contemplate flooding the US market by summer of 2007.

Perhaps the Chery could more aptly be called the `Chicane’.

A name change for the Chery is necessary now that the Chinese automaker has agreed not to use a brand name similar to `Chevy’ when marketing its cars in the U.S.

That’s a small concession for Chinese automaker Chery Automobile Co, given that its copycat Chery QQ looks so similar to the design of Daewoo’s Matiz.

Even though General Motor’s Corp. investigation results showed the two vehicles "shared remarkably identical body structure, exterior design, interior design and key components," the US. Auto giant said t has reached a settlement resolving all legal disputes with Chery Automobile Co.

Before Strong and Soros got into the act, the Chery Automobile Co. focused its exports on 10 other countries, including Iraq, Iran, Bangladesh, Cuba, Syria and Malaysia.

About 50,000 Cherys sold in China for $3,600 last year. Estimated American price list for the Chery is $20,000.

With GM agreeing to settle its legal claims against Chery, guess the automaker is none too worried about the big push into the American auto market contemplated by Strong and Soros.

Meanwhile Disney and Pixar whose animated auto film Cars cashed in with $31.2 million during its second weekend in theatres, could have used Chery-Chicane as the ‘bad guy’ in its blockbuster hit.

According to Canada Free Press film critic Larry Anklewicz, "Cars is a magical animated film that will delight children and adults alike.

"It’s full of humour and pathos and truth. It’s an instant classic that will be around for generations to come."

"Cars tells the story of Lightning McQueen, an outgoing red racing car who is challenging for the Championship in his rookie season. McQueen and two rivals, had finished in a virtual tie during the last race of the season, so was traveling across the country to participate in the Piston Cup Championship where only the three finalists would compete.

In an animated film where cars come on like people, there’s even a love interest, "Sally Carrera, a sexy 2002 Porche".

Think what the Chery could have done for the film. A bad guy, ready to raid the American market, just prior to American elections as a knockoff of the South Korean Spark. Flooding the market with cheap exports could help bring down not only George W., but also that war-mongering Uncle Sam.

Besides while Cars only stars the voices of Owen Wilson, Paul Newman, Bonnie Hunt, Larry the Cable Guy and Cheech Marin, Chery stars the real thing, the Dr. Goldfingerish Maurice Strong and the Dr. No like George Soros.

In Cars, the feckless McQueen falls into police custody in the sleepy town of Radiator Springs and is forced to repair the town’s main street, which he had destroyed on his way to the big race through town.

Putting in his time on community service, McQueen gets to rub fenders with the town’s offbeat characters, including Doc Hudson, the 1951 Hudson Hornet with a hazy past and Mater, the rusty tow truck driver who is just a kid at heart, all the while developing a love affair with Sally Carrera.

But Cars is only an animated film that comes complete with a terrific musical score, while the true story of Chery, starring Maurice Strong and George Soros is real life imitating art.

source:canadafreepress.com
 

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Chery still plans to export cars to the United States

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Chery still plans to export cars to the United States


By ALYSHA WEBB | AUTOMOTIVE NEWS

AutoWeek | Published 12/04/06, 8:18 am et



SHANGHAI -- Malcolm Bricklin's proposed partnership with China's Chery Automobile Co. is dead. But Chery's plan to export cars to the United States lives on, suppliers here said.

"Chery is continuing to look at U.S. opportunities," said the head of China operations for a large U.S. company. The executive attended a Nov. 22 Chery suppliers meeting at a hot-springs resort in the Beijing suburbs. The source declined to be identified.

A Chery spokesman said: "We don't have a time line to export to North America and western Europe. We would like to wait until we are a little bit stronger to enter those markets."

Other suppliers confirmed that Chery is talking with several potential investors about developing and selling a Chery-brand car in the United States. The suppliers said it is unlikely any agreement will be reached soon.

"We are talking about a major commercial agreement," said the head of China operations for a European supplier. "Things like this take time to set up."

Meanwhile, Chery plans to concentrate on boosting exports to markets such as the Middle East, North Africa and Russia, suppliers said. Chery builds cars from kits in Russia, Ukraine, Iran and Indonesia.

'Not practical'

Chery will export 50,000 cars this year out of a total production of 300,000 units. A Chery executive said the original plan to begin exports to the United States in 2007 was "not practical." He said: "It's our dream to sell vehicles in the U.S. and Europe."

Chery's plan to export its own brand of cars to the United States and Europe is separate from negotiations with DaimlerChrysler about building a small car for export, Chery managers and industry sources said.

Billionaire George Soros still wants to invest in Chery, suppliers and other industry sources said. "Soros wants to put in more money, not less," the European supplier executive said.

Bricklin-Chery divorce

Under Chery's original plan, devised in 2004, Bricklin and Chery planned a joint venture to develop cars and sell them in North America. Bricklin raised money from car dealers and others, including Soros.

Last month at the Beijing auto show, Bricklin said his company, Visionary Vehicles LLC, and Chery had broken off negotiations.

The divorce marked the end of a tale that started two years ago. Bricklin evoked deep skepticism - and some chuckles - in industry circles when he announced his plan to import Chinese vehicles with Lexus quality and Chevrolet prices.

Bricklin had launched the Subaru brand in the United States but also such flops as the Yugo. His proposal had attracted a $200 million commitment from Soros' investment company, sources in China said.

Bricklin declined to confirm that Soros was the source of the money, but Bricklin said the $200 million was returned. The money never left an escrow account, he said.

Sources in China said Chery executives and Bricklin could not agree on how the $200 million should be used. Chery wanted more money for r&d, said sources familiar with the situation. Bricklin wanted to use it to build a U.S. distribution network.

Despite the end of the Chery deal, Bricklin said he still has a plan to bring China-made vehicles to the United States and possibly Europe by 2009. Visionary Vehicles still has an undisclosed pool of investment capital provided by would-be dealers and other investors.

Bricklin would not reveal how much money is in the pool but said it's "enough to do engineering and design for the prototypes we need."

Visionary has 28 dealers who have rights to 50 U.S. sales territories. Each dealer has invested $2 million per territory. Bricklin said he will refund their investments if they want
 

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Chery still plans to export to US /G. Soros wants to invest in Chery, more, not less

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http://www.autoweek.com/apps/pbcs.dll/article?AID=/20061204/FREE/61204004/1024


George Soros is the last guy on wall street that will throw away $200 million and yet he still wants to invest in Chery. This time the possible con man is gone, he wants to put more on the table. :cool:

I hope Chery recruit some seasoned veterans/consulting companies to work for them this time, avoid making the same stupid mistakes Koreans made. :p
 

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Soros much smart man with lots of $$$
He also making much $$$$ from failing american economic system which lose wars in iraq and viet nam due to cowardice and incompetence. Soros just write a book on failure of american empire, china is the next big empire due from hard working and strong ethics of society.
How much will chery retail for in canada and usa ??? Is the dealer network set or is opportunity still available?
North american auto production is doomed from unions greedy nature and lazy and stupid workforce. There is good reason why most private schools of merit are teaching Mandarin to advanced students.
 

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Chery USA Business

Now that Bricklin deal with Chery has fallen apart what is Chery new strategy for entry into USA? Who are they presently talking with to partner
 

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Diesal7 said:
Now that Bricklin deal with Chery has fallen apart what is Chery new strategy for entry into USA? Who are they presently talking with to partner
Arnt they going to produce the Dodge Hornet here in China for them? Im sure dodge will have a new range of cars from chery in 08 or 09 ;)
 

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chinacartimes said:
Arnt they going to produce the Dodge Hornet here in China for them? Im sure dodge will have a new range of cars from chery in 08 or 09 ;)
It was discussed...but don't count on it.
 

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Feeling Chery?

editorial from conservative site


source:commonconservative.com

Finally, the Chinese invasion begins!

Are you feeling a bit Chery? This week, Chrysler chief exec Tom LaSorda announced a big contract to sell Chery automobiles in America. What’s so interesting about that? Because for the first time, Communist Chinese cars will be trolling your streets, fishing for American dollars. But China already helps make WalMart the biggest company in America. So what’s the big deal?

Actually, it’s not a “big deal.” Well, in terms of money it may be a huge deal. But the story behind Chery is interesting. No, make that intriguing. Wait…make that absolutely nuts.

Let’s get a little history here.

Chery is actually an accidental mistranslation of the word “cheery.” But they kept it anyway. Except they won’t call it “Chery” in America, because it sounds too much like “Cherry,” which sounds sorta like “Chevy.” For a Chrysler product, that’s not good. Plus, Chevy sales are in the toilet.

Back to our story. Chery started as a little auto manufacturer in China only nine years ago. They bought $25 million of equipment from Ford, licensed a chassis from Volkswagen, and in true Chinese tradition, proceeded to pirate car designs from Ford, Chevy and Daewoo. Then, they got serious, and decided to expand. A lot. Chery hired a Japanese engineer from Mitsubishi, and adopted old GE hot shot Jack Welsh’s Six Sigma management system. They hooked up with Malcolm Bricklin, added Ferrari’s Bertone and Pininfarina designers, had their engines designed at Austria’s AVL, partnered with Germany’s Bosch transmissions, and Britain’s Lotus chassis engineering and TRW parts.

You follow all that?

Well, it worked. In 2000, Chery sold about 2,000 cars. By 2006, they cranked out 300,000. When they enter the American market in 2009, Chery expects to quadruple that figure.

Of course, cobbling an automobile from all those countries sounds like a true victory for a global economy. But global manufacturing makes strange bedfellows. Chery has manufacturing plants in China, Malaysia, Egypt, Urugway, Pakistan, and (drumroll, please)…Iran! And their first export? Syria. It sounds kinda nuts, right? We are using a communist country to lure these 13th Century cultures into the capitalist world, yet simultaneously support these enemies as they plot to destroy us.

But there’s more.

Chery makes entry-level small cars at an incredible price. But in this arrangement, Chrysler only distributes Chery. They are not manufacturing anything. That is significant because while sales are slumping and plants are idle, Chrysler is entirely bypassing their existing operations, and simply importing and distributing the Chery small-car line. You could easily make the case that Chrysler is moving from a manufacturer to a pure distributor.

For Chrysler, that is a big deal. And for the United Auto Workers, it's an even bigger deal. The UAW was ready to strike Chrysler to regain previous concessions to Ford and Chevy. But after Chrysler posted a $1.5 billion loss, union officials backed off a bit. This deal may serve as an added warning.

Of course, historically, imports have made significant inroads. In the 70s, Japanese autos took over the American market by offering great gas mileage and a lower price. Eventually, their better reliability commanded a higher price than American cars. Then, Koreans (Daewoo, Kia, Hyundai) came along and offered reliable cars, but sold them for even less. Now, Chinese Chery is entering the American market with even cheaper cars. But unlike most foreign auto makers, Chery won't create any American manufacturing jobs. Instead, an American auto manufacturer will merely distribute. Period. It looks remarkably like the WalMart-ization of the U.S. auto industry. And 75 American dealers have signed up.

For the moment, let’s ignore the economic debate. After all, the giant sucking sound of outsourced jobs has created record low unemployment, the best stock market in history, all-time record personal wealth ($52 trillion!!!), no inflation and low interest rates.

The more interesting story is the twisty-turny tale of Chery and the world auto industry. The United States of America, perched at the dawn of the 21st Century, the world’s sole superpower, is a capitalist nation importing autos from communist China, who gets parts and designs from countries in Europe, South America and Asia, manufactured in at least 6 nations whose people want to destroy Americans, although two of them sell us oil. Daimler Chrysler will only distribute the Chery, theoretically sacrificing American manufacturing jobs, even as our unemployment rate drops to historic lows. Oh, yeah, and we don't even know what Chery will be called. And it all started when a little Chinese company bought some used equipment from Ford.

Sheesh. Makes you want to watch TV. Wanna hear the story about how that got to your living room?
 

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razorback said:
...
I realize that this is an older article but maybe things have changed since this was typed? Does anyone know??
Very old article on a subject that has had major changes. Very little of the article relates to where it is now.

Google "Chery", "Bricklin", etc.
 

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Chery's cost skyrockets as it is forced to use foreign parts in US spec cars

Delphi to announce supply deal with China's Chery
January 7, 2007

By JASON ROBERSON

FREE PRESS BUSINESS WRITER

Delphi Corp., the nation’s largest automotive supplier, on Tuesday at the Consumer Electronics Show in Las Vegas is expected to announce a contract with Chinese automaker Chery Automobile Co. to supply an integrated navigation system and safety products, including airbags and crash sensors.

Chery has lately become a symbol of China’s growing automotive industry and an example of the industry’s ever growing international partnerships. The Chrysler Group on Dec. 29 announced an agreement to import Chery’s Chinese-built subcompact cars to the United States and Europe, a milestone that could lead to the first Chinese cars on American roads.

Chery’s volume has increased from 50,000 cars in 2002 to almost 300,000 in 2006. And Chery expects to increase its production and sales volume to 1 million cars by 2010. As a result, auto suppliers, already embattled with production cuts from Detroit’s automakers, have put a focus on China as a revenue source.

“It’s truly exciting to be named a major safety supplier for China’s fastest growing domestic auto company,” said Dan Salmons, managing director of Delphi Electronics & Safety, in a statement.

Also at the Consumer Electronics Show, Delphi will unveil its TV reception technology, which will be an option in future BMW models.

Delphi’s Fubu reception systems offer near-DVD color picture quality and stereo sound through using multiple antennas built into the vehicle, integrated amplifiers and ScanDiv, Delphi’s patented reception-scanning technology.

Delphi’s Fubu TV reception system — made at its facility in Bad Salzdetfurth, Germany — is an example of how the bankrupt Troy-based auto supplier is moving away from non-competitive products such as brake hoses and spark plugs to more highly profitable, highly technological products.

“BMW motor vehicles are known globally for adopting the latest features, and Delphi’s reception systems align well with BMW’s commitment to innovation,” Andreas Hunscher, director of Delphi Fuba, said in a statement.
Chinese parts not good enough for US, must use foreign parts in US export models. Chery's low labor cost advantage vanishes quickly.

Imported steel sheet.
Imported transmission
Imported airbags
Imported crash sensor
Imported ABS system
Imported catalyst converter
Imported brake
Chinese labor
 
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