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By HUGH R. MORLEYFirst it was Japan, then Korea.
Now China is eyeing the U.S. car market, and a Parsippany company wants to lead the way.
China America Cooperative Automotive Inc. (CHAMCO Auto) says it hopes to start selling low-priced, Chinese-made SUVs and pickup trucks in the U.S. by late next year.
The company says the vehicles will come with two- or four-wheel drive and get 25 to 30 miles per gallon. They'll cost about $13,500, a price tag that industry analysts say is $2,000 cheaper than similar vehicles now on the U.S. market.
The first two vehicles arrived in Newark on Wednesday, and the company expects to spend the next few months showing them off to consumers and dealers.
"The price is an important factor," said Bill Pollack, CHAMCO Auto's executive vice president. "But we believe the critical success factor will be to deliver style and quality to the consumer at an attractive price."
Analysts say the company faces several hurdles to making a significant dent in the U.S. market. They include stringent U.S. government tests for emissions and safety before the cars can take to the road, and a growing field of competitors.
One of them, New York-based Visionary Vehicles, has formed a partnership with Chery Automobile, one of China's largest car manufacturers.
The venture was started by Malcolm Bricklin, who successfully brought Subarus to the U.S. in the 1960s and less successfully sold Yugoslavian Yugos through an Upper Saddle River importer in the 1980s.
Several Chinese car companies also have announced plans to target the U.S. market, among them Zhejiang-based Geely Automotive Co., said Jim Hossack, a consultant for California-based AutoPacific, a car industry research company.
"There's a lot of wannabes," he said. He added that he also wouldn't be surprised if an established car company such as Ford, Volkswagen or GM -- all of which have plants in China -- decided to import Chinese cars into the U.S.
"Sooner or later, Chinese cars are coming to the U.S.," Hossack said.
The company is a subsidiary of First Capital Corp., a Parsippany-based merchant bank that buys, improves and sells companies.
Pollack, who declined to identify any of First Capital's past investments, said the bank departed from its usual business model after seeing the quality of the vehicles, which are made by Hebei Zhongxing Automobile Co. of Northern China.
He said CHAMCO Auto has "hired a number of serious car experts for safety, quality, public relations and marketing, dealer relationships, logistics -- all of the major functions where we need true automotive expertise."
Though CHAMCO Auto is still in the early stages of the federal approval process, it's already making bold predictions. It hopes to line up 100 dealerships, and is looking for sales of 30,000 to 50,000 cars in the first year and 900,000 cars within five years.
Industry analysts, however, say CHAMCO Auto's target of selling 4,000 to 15,000 cars a month could be difficult to achieve.
David Lucas, vice president of Auto Data Corp., a Montvale-based car-industry research company, noted that Subaru sells only 20,000 a month after several decades in the U.S. market. Even Hyundai sells only about 50,000, he said, adding that the low-priced car sector has high competition and little growth.
"The biggest problem entering the auto market is the fact that you need a supply chain," he added.
"Getting the products here is only half the battle. Because unlike most consumer goods, a car needs service."
New car importers in the past have paired up with established dealer networks to provide service and repairs, a strategy that meant they did not have to create their own facilities, Lucas said.
But most established car companies now want dealerships to sell only their own brands, he said.
Ray Dreyfus, a CHAMCO Auto vice president, said the company is not worried. Discussions so far with dealers have drawn a positive response, and the company expects the warm reception to continue as it shows off the two vehicles, he said.
He noted that the cars are already being sold in China and 40 other countries around the world.
"Dealers, being independent businessmen, are looking for the next opportunity," he said.
"And no one wants to miss being involved in the next Honda or Toyota. They want to be in on the ground floor."
 

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They'll cost about $13,500, a price tag that industry analysts say is $2,000 cheaper than similar vehicles now on the U.S. market.
High price of Chinese imports guarantee their prompt death.

There is no market for Chinese cars priced over $10,000; Chinese must swim where there are no sharks. This means a fully loaded C-segment car priced under $10,000.

Of course, the other option is a $20,000 Chinese car with an interior of Rolls-Royce.
 

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PERFECT CONSTRUCTION
The research centre of Hebei Zhongxing Automobile Co.,Ltd includes 150 engineers ,of which 17 senior researchers and 70 researchers .About 50% of researchers has more than 10 years experience related with vehicles.
Wow, 150......

BTW, that pick up cannot be imported into the US, a 25% tariff imposed on foreign pick ups.
 

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Another Euro-III SUV with only 129 HP pushing 1700 kg hunk of mass. Kinda like back to the future, a 1988 Toyota pick up reappearing in 2006, but without the quality.

A long way to go before passing the US emissions and crash test, if Toyota doesn't sue it to keep it out of US market.
 

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I believe the 25% tariff on pickups only applies to 2 door single cab versions. 4 doors double cab should avoid that tariff. (I can't confirm this...)

Both vehicles looks good - too many Toyota cues though, esp the truck... the BMW / Land Rover cues are actually quite nice - not over-done if you will.
 

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IP issue for Zhongxing

I believe Shenyang Brilliance once was majority owner of Zhongxing. Since Brilliance has been producing vehicles under Toyota license for some time now, I wonder if Zhongxing is licensed to produce Toyota-based vehicles. Otherwise it seems Toyota would have taken Zhongxing to court earlier, the way it did Geely.
Interestingly Zhongxing is one of the few SUV and pickup producers that didn't include Isuzu or Fudi-based models in its lineup. Even Great Wall and FAW did that.
 

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correction

Correction:
Zhongxing Auto did include at least one Isuzu/Fudi-based model in their line-up. It was the Fuxing.
 
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