I told you. :lol: :lol: :lol: :lol:Bricklin delays plans for importing Chinese cars
Wed Sep 13, 2006 6:23 PM ET
By Poornima Gupta
DETROIT (Reuters) - Maverick entrepreneur Malcolm Bricklin, best known for bringing the low-cost Yugo car to America, has delayed for the third time his ambitious plan to import Chinese-made cars to the United States.
"I was jumping a little bit faster than my host could handle," Bricklin told the Reuters Autos Summit in Detroit on Wednesday. "At the end of 2008 and beginning of 2009, the first cars will hit the shores."
The energetic and outspoken Bricklin had initially set a target of January 2007 for the first sales of the vehicles. He later moved back the date to the summer of 2007 and then to the end of the year.
Bricklin said that he now has 50 dealers on board, far below his targeted 250 dealers, and is planning to launch models priced from $15,000 to $45,000. The cars are expected to compete with top-line luxury brands such as BMW, Audi and Mercedes.
Bricklin has a long but spotty track record importing and selling cars in the United States. His most successful venture to date has been the launch of Fuji Heavy Industries Ltd.'s (7270.T: Quote, Profile, Research) Subaru brand in America in the late 1960s. Chief among his flops was the Canadian-made Bricklin SV-1 sports car that was in production for a mere two years.
Dealers have to invest $2 million to sign up, he said.
"We have stoped officially taking money from dealers until the joint venture is signed, which is imminent," he said.
The 67-year-old, who formed his company, Visionary Vehicles, for importing cars, is in the process of finalizing a joint venture with China's Chery Automobile with Chery holding 60 percent and Visionary taking a 40 percent stake.
Bricklin said he expects to sign the joint venture agreement by the end of October or early November.
Privately held Visionary Vehicles will launch 20 vehicle models over five years, starting with one model on sale in late 2008 or early 2009 and four other models on display in showrooms, Bricklin said.
From then on, the company plans to introduce a new car every three months.
"I think we can do 150,000 cars the first year," Bricklin said.
So far, many industry watchers have been skeptical about Bricklin's vision, especially given the delays in launch and slow progress in signing on dealers to sell the cars.
But Bricklin remains confident.
"We are putting our face out there and saying, 'Look at us.' And if we do our job, we're going to win this game," Bricklin said. "And if we don't, we're going to get our ass kicked right on the first day."
Dealers burned by Malcolm Bricklin won't touch Chery even if the VV goes bankrupt and Chery decides to go alone. Bad words of mouth goes around fast, you know.Malcolm Bricklin's next adventure: make the Chery a hit in North America
Jason Kirby, Financial Post
Published: Saturday, September 16, 2006
Malcolm Bricklin sure knows how to put on a show. For more than a year the famous, or perhaps infamous, automotive entrepreneur has been orchestrating what could turn out to be the biggest blockbuster in U.S. automotive history -- a plan to sell quality Chinese-built cars on U.S. soil at rock-bottom prices by 2008.
He has assembled a colourful cast. Mr. Bricklin, whose past schemes to import or build his own cars have flamed out in acrimonious lawsuits and bankruptcies, takes the lead roll as the importer. There's the manufacturer, Chery Automobile Co., one of China's star automakers. Maurice Strong, the Canadian businessman, environmental crusader and international man of intrigue, has signed on as an advisor. Billionaire George Soros is reportedly writing the cheques.
And it's all being captured on video for posterity. "This interview is being recorded right now," Mr. Bricklin said on the phone from New York.
Whether North American automakers are ready for the curtain call or not, Chinese cars are on the way. China already exports more cars than it imports, to countries such as Russia, Algeria and Vietnam. Chery is designing models for sales in the West, and will put them through a barrage of tests to meet stringent U.S. standards. The cars will be relatively cheap, too, selling for 30% less than comparable models.
This is the latest in a string of import ventures for Mr. Bricklin. His efforts to bring Yugos and Subarus into the United States ended in disaster. His plan to build a car in New Brunswick in the 1970s left taxpayers there with a nasty bill. Now through his company, Visionary Vehicles, he is establishing a network of more than 200 dealers to sell Chery models.
Mr. Bricklin said he was drawn to Chery immediately upon visiting the company. For its export vehicles the carmaker has tapped international expertise, using an Italian design house to sculpt the bodies while turning to the Germans for engineering. On his Web site Mr. Bricklin bills the vehicles as "international cars with American soul."
Likewise Mr. Bricklin is aligning himself with prominent individuals such as Mr. Strong, a former United Nations diplomat and favourite of conspiracy theorists everywhere for his global rolodex. Mr. Strong spends much of his time in China these days as a consultant. He stepped down from the board of directors at Toyota to be an environmental advisor for Chery. Mr. Bricklin has also given him the distribution rights to sell Chery cars in Canada, though that's a ways off.
Mr. Strong said he fully expects North Americans will eventually be driving Chinese-built cars.
"The Chinese recognize the automobile industry has always been a major factor in any industrialized country, and they are aspiring to be the largest producer in the world," said Mr. Strong during a brief interview in the lobby of his Shanghai hotel before he was to catch a flight back to his office in Beijing.
Through Mr. Strong's office, Chery declined to make any of its executives available for interviews, though it offered a tour of its factory in Wuhu, a city roughly 500 kilometres west of Shanghai. The phone has been ringing off the hook since Mr. Bricklin began promoting his plans to sell Chery cars in the United States, explained Mr. Strong. The company just wants to focus on its business.
It could also be that Chery is growing wary of having its name dragged through the mud. The U.S. business media have jumped on the Bricklin/Chery story, and each article dregs up Mr. Bricklin's zany past. One western automotive executive familiar with Chery said the company views Mr. Bricklin's Visionary Vehicles as "an interesting part-time recreational event while they really go about what they want to do for export. They figure they might even learn something from his experiences, even if they weren't good experiences."
So far the script hasn't played out quite as smoothly as Mr. Bricklin would like. His office has yet to finalize the import agreement with Chery. The launch date for Chery in the United States has been pushed back a year to 2008. And a group of senior Chery executives recently walked out the door, threatening to delay things further.
Meanwhile, the Chinese government has started talking about export limits in the auto sector.
"If a Chinese car comes into the U.S. and bombs, people will think all Chinese cars are the same," said Mr. Strong. Already Geely, another Chinese car company, has scrapped its export plans because its cars wouldn't meet U.S. standards.
Even Mr. Strong seems to be hedging his bets.
"I wanted to position myself so that if the deal with Visionary doesn't go ahead, that I could still help [Chery] because they're going to go ahead with [their export plan] anyway," he said.
Mr. Bricklin still has his believers. Tim Ciasulli, a New Jersey car dealer, has plunked down $4-million to be one of Mr. Bricklin's U.S. dealers. While he called Mr. Bricklin "the poster child for ADD, he's liked what he's seen. Mr. Ciasulli first went to China in the late 1980s. Last year he went back and visited Chery's plant.
"I expected to see sweatshops full of thousands of people when what I saw was the most roboticized plant I'd ever seen," he said. "They seem more capitalistic than we are. I know with that mentality they have, given a well-engineered product, the quality we're going to get is going to be world class."
No money for Chery USA.Chery should enter the US as Chery North America, Inc. and not take the short-cut in the form of M. Bricklin.
Exactly.The American auto market is simply too advanced for the Chinese at the moment.
What? A $45,000 Chery? Who the hell is going to pay $45,000 for a Chery?Bricklin said that he now has 50 dealers on board, far below his targeted 250 dealers, and is planning to launch models priced from $15,000 to $45,000. The cars are expected to compete with top-line luxury brands such as BMW, Audi and Mercedes.
exactly critics are saying chinese not ready at the moment,gr8 said:its not like they are never going to come
i think what malcom wants to do is get into the us market in another way. everyone is brainwashed in a way where, a new car company must start making shitty cars with a low price and beating all the competition just because they have a low price. well malcom wants chery to enter in a different style. instead of " ill buy this chery because its cheeper than any other car in the same class" he wants "if i am going to spend $20 000 on an shitty chevy aveo hatch, with crappy performance and cheep handling why dont i spend it on a m14 hardtop convertible with better styling, more power, and better handling etc etc."Colvindesign said:Malcom is going to screw things up for a lot of people, including myself.
First off, the designs are ok, but not quite there.
second, he needs to keep the price down below US priced cars, and offer great quality instead of luxury.
He is trying to jumpstart the companies Venture into the US by jumping into the luxury segment.
Not going to happen.
People do not buy luxury cars from companies they never heard of, not in the US anyway.
150,000 units in the first year? That means each dealer will need to sell 3000 cars a year, or about 10 a day. Not with cars up to 45k.
I have tried to contact Cherry, and VV, to no success. I tried to contact Cherry to offer advice, and VV to try to get in to try to talk some sense into Bricklen.
A front wheel drive sports coupe from China with a 4 cyl will not compete with a rwd mercedes convertible. No matter how he slices it.
While he may have been in charge of Subaru entering the US, he was also behind Yugo entering the US. It seems he is going the opposite of that one, and making the cars too high to enter the US. With Yugo, they made no changes and sold them in the US for dirt cheap, this is why they collapsed. If they would have made changes to make the cars more appealing and higher quality), they would have lasted.
He is the reason why many companies won't talk to me about a US-venture, they are already seeing things are going bad.
I got a couple of words I would really like to say to him. :nono:
sorry to disagree.gr8 said:i think what malcom wants to do is get into the us market in another way. everyone is brainwashed in a way where, a new car company must start making shitty cars with a low price and beating all the competition just because they have a low price. well malcom wants chery to enter in a different style. instead of " ill buy this chery because its cheeper than any other car in the same class" he wants "if i am going to spend $20 000 on an shitty chevy aveo hatch, with crappy performance and cheep handling why dont i spend it on a m14 hardtop convertible with better styling, more power, and better handling etc etc."
Newbies always start from the bottom, not from the top.everyone is brainwashed in a way where, a new car company must start making shitty cars with a low price and beating all the competition just because they have a low price.
And where on earth do you pay $20,000 for a Aveo hatchback? $20,000 is a Civic Si territory.he wants "if i am going to spend $20 000 on an shitty chevy aveo hatch
M14 doesn't stand a chance against Honda Civic Si in same price range.with crappy performance and cheep handling why dont i spend it on a m14 hardtop convertible with better styling, more power, and better handling etc etc.
you're right. But the labor and overhead costs in China are much lower.Real_I_Hate_China said:Newbies always start from the bottom, not from the top.
And where on earth do you pay $20,000 for a Aveo hatchback? $20,000 is a Civic Si territory.
M14 doesn't stand a chance against Honda Civic Si in same price range.
This is Chinese car's problem; they are not really cheaper than Japanese and Korean cars once you start throwing in all the equipment required to be US and Euro regulation compliant. Chinese cars are cheap now because they don't have 6 airbags, ABS, and safety engineering.
the 10k market is the largest. If done right, they can make 2k per vehicle and sell 200,000 (one model) of them in a few years. That will beat out 5-10,000 per vehicle times 5,000 units (per model) any way you try to do the math, and at the prices he's talking, those are the more realistic projected production numbers. You have to think about the costs of vehicles from one end to the other. you have from under 10,000 dollars all the way up to over 1.3 million. Sure, there is only a few sold at 1.3m, but that plus all the ones sold for over 50,000 affect that average car price. If 1/2 of the cars in the world were sold for under 10,000 and half were sold for 30,000 or more, your average would be over 20,000, but that does not mean it is the largest market.BringIt said:In terms of the strategy for entering the US market - it's pretty simple.
Offer more for less money. That's it, nothing more.
The only question is which segment you go after first, and I like Bricklin's strategy. It's risky, but offers the biggest reward - if done correctly.
The average transaction price of a new car these days is well over 20K, so we know that is the heart of the market - so why not position all of your cars in this price range? You know that people's got this kind of money. But then, how do you get people to spend their 20+K on your product? Give them more for their money. Leather, Nav, 4WD, V8, 10 year warranty and maintenance, free car washes, etc. etc. Again, great strategy, if done right.
To do this "right", the product must be up to par with the others, and that is the biggest question mark in my opinion.
Going after the 10K market? No profit whatsoever, so why bother. Sure there's less risk and less effort, but Bricklin is not into a 20 year plan for greatness, he's looking at 10. Business 101, rule #1 - Profit is king, everything else comes in second.
The 45K car? I think I read somewhere it'll be like a MBZ S-Class, full-size RWD sedan with V8 and every possible feature. Again, if done right, I'd think people would buy one - I would.
BringIt said:The 10K market is the largest? I guess you're including used car sales? I was only talking about new car sales.
Because Chinese car makers don't yet have the efficiency, technology, and the economy of scale the major players enjoy, I really don't think they can really make cars much cheaper than the major players - think Hyundai and Toyota, not GM or Ford. So to assume Chinese car makers can make a good profit in the razor thin profit segment of 10K cars is a coin toss - none of the existing car makers make much of a profit on sub 15K cars, if fact, most of them sell them at a loss for the sake of market share and future repeat buyers. Nearly all of the profit is generated via 20K or above sales.
