Malcolm Bricklin taunts Geely for CK's US test failures.

Wrong Turn: China Automaker Hits Roadblock


August 10, 2006

By Steve Miller

DETROIT -- Chinese automaker Geely will not import its CK sedan in the U.S., as it had promised to do, after the small car failed to meet safety and emissions standards here. Instead, the company will develop a new sedan with planned delivery for 2009, entering the North America market a year later than previously planned.

Geely sent 12 CK sedans, accompanied by a team of engineers, to the U.S. earlier this year for testing—and hoped-for approval—for market placement.

“These cars did pass on much of the criteria,” said Rick Zhang, project manager, Geely International Corp. in Shanghai, China. “But the model that we have wanted to put on the U.S. market, the CK sedan, may not be able to pass the standards.”

U.S. standards for safety and emissions are higher than many other countries, imposing higher costs on fledgling foreign automakers.

Geely, which showed the 7151 CK Geely sedan during the media preview at the North American International Auto Show in January, will instead develop a new car to enter the market here, Zhang said.

The plan is now to sell a midsized sedan rather than the $10,000 CK. Parts for the new model are “roughly” ready, Zhang said, “and now we are looking at where to assemble it.”

The move on the part of China’s government to bring Chinese-built autos to the U.S. has spurred furious development projects there and, in some cases, impediments such as Geely’s.

“Some of these [car companies] are going into the export markets without doing all of their homework,” said Ashvin Chotai, director of Asian automotive research at Boston-based Global Insight. “The CK was only launched in China last year and is one of Geely’s first self-developed products. They are trying to squeeze into five years what the Japanese did over 15 years, and they need to get to know the U.S. standards better. And to fail tests with a dozen vehicles is very much testing the waters.”

Geely had previously announced plans to hit the U.S. market in 2008, a highly anticipated foray from a country in which the hourly auto factory assembly pay averages $2 an hour compared to $60 for wages and benefits in the U.S., which would allow the companies to offer cheaper-priced cars than their American counterparts.

Several other Chinese automakers, including Great Wall Automobile Holding, Zhongxing Auto and Chery Automobile Co. have plans to bring their cars to the U.S., although their timelines, once set on 2007, are now changing, like Geely’s.

All are facing formidable U.S. bureaucracy as well as trepidation from domestic automakers, which are well aware of previous car invasions from Asia, including those from Japan and South Korea.

“I could have told you that Geely was not going to succeed in the crash tests,” said Malcolm Bricklin, the feisty U.S.-based auto entrepreneur who pledges to import cars made by Chery into the U.S. at the end of 2008. “Geely showed how inexperienced they are. They just took their cars here and put them through crash tests. The safety standards are so different here.”

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