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."