China Car Forums banner

1 - 15 of 15 Posts

·
Registered
Joined
·
507 Posts
Discussion Starter #1
Some of y'all have some very valid concerns about the potiential hurdles a new foreign car maker have to overcome when entering the US market - let's concentrate the debates in one single topic... :thumb:

I'll throw a few out first:

- US consumer's loyalty to domestic brands can't be cracked.
* FALSE. Toyota is outselling Fords in many of the months this year, and had already pass Chrysler a while back. Imports outsell Domestics as a whole too.

- It's impossible for a new brand to crack the market, look at Daewoo and Yugo!
* FALSE. Look at Kia and Hyundai. Good product, sound startegy, and low prices will always prevail.

- Too much good used cars on the market, which means no one will buy an unproven new car from a new brand.
* FALSE. Look at Kia and Hyundai.

I can go on and on, but please share your thoughts!
 

·
Registered
Joined
·
176 Posts
Thoughts? Mostly that those are NOT the concerns regarding Chinese cars in America. I'd have to say those would be well towards the bottom of the list.

The number one concern on the list would be QUALITY.

Americans (and I am a very proud American) would buy, will buy, from a nazi heroin addict porn-star who abuses children if the quality/price are right. It has nothing to do, at all, with China.
 

·
Registered
Joined
·
507 Posts
Discussion Starter #3
Please read carefully, no where did I mention "China"...

Anywho, your #1 concern, as with many Americans, is product quality.
* Every car maker looking to enter this market knows they have to get their quality up to par before entering, so you can relax there. The products won't be too much off from the rest of the industry in terms of quality by the time they get here.
 

·
Registered
Joined
·
507 Posts
Discussion Starter #4
Another concern people have is - oh where do I get service for my new car from a new car brand???

Well, duh, at the freaken dealer you bought your new car from! Don't remember where you bought your new car??? Well, I can't help you there...

All kidding aside, if a new car brand doesn't establish at least 200+ dealers across the states within the first year or two, and use as many common and readily available parts in the car parts industry, they've got the wrong game plan - and I'm sure they know that already - If not, they NOW DO.
 

·
Registered
Joined
·
176 Posts
BringIt said:
* Every car maker looking to enter this market knows they have to get their quality up to par before entering, so you can relax there. The products won't be too much off from the rest of the industry in terms of quality by the time they get here.
No disrespect intended here, but....

How can you say that? How do you know that? Look what happened in another of today's posts, car getting destroyed in a review. Were they just not serious there, but will do better here?

Quality is relative - eye of the beholder. The BS6 introduction that was destroyed in the UK - certainly the manufacturer felt the quality, design was good enough. It was not.
 

·
Registered
Joined
·
507 Posts
Discussion Starter #6
Quality and design are two completely different things.

You can still have a quality car with an gaud-awful design.

Be realistic about this, the quality will be slightly below average at best, don't expect MBZ quality in the first years. But somewhat below average is very acceptable to some if the price and warranty is right.

You want top of the line quality? Then don't buy a car from a new brand. Buy a MBZ. (Then you would have to pay for it, big time).
 

·
Registered
Joined
·
176 Posts
Realistic would be to know that, if I come to the US market with "quality (that) will be slightly below average at best", nobody will want to buy my car, as buyers can already get a Hyundai at a good price, fantastic warranty, nice styling, and proven performance. Or any number of other brands that meet or exceed those thresholds.
 

·
Registered
Joined
·
507 Posts
Discussion Starter #8
Guess what, Ford is also below average. So is Dodge. Yet they still sell.

What does that tell ya? Quality is NOT the #1 concern of the average American consumer.

If you look at any survey, the #1 reason almost always comes out to $$$. If you can give the consumer the most for their hard earned buck, you have a good shot of getting their business.

If and when a new car brand can hit close to the average of every single measureable aspects of car attributes people look for, from dealer network to long term reliability, and sell the cars 20% lower than competition (even lower than Kia and Hyundai), I see a success story.
 

·
Registered
Joined
·
772 Posts
Look at Kia and Hyundai.
Young Hyundai Motor Corp was a part of a $60 billion/year corporate giant that could afford to dump $10 billion into R&D and capacity expansion. All the figures are in early 90s dollars, not 2006 dollars(Equivalent to $20 billion in today's currency). Kia are simply rebadged Hyundais and nothing more.

You cannot take Hyundai's example to prove your arguement; Chinese automakers don't have $20 billion in the bank to blow on a new 10,000-men R&D complex complete with 5-mile tracks and a wind tunnel.

Hyundai is the result of a $30~50 billion dollar investment in R&D, quality control, and production facility over 20 years. Not even SAIC and FAW could raise this much capital investment, much less Chery.
 

·
Registered
Joined
·
249 Posts
A brand is important. Look at how Lexus is now desparatley trying to dell it's cars to fleet buyers in Europe because Europeans prefer their Land Rovers, Mercs and Beemers. Or how Smart's sales are struggling whlist MINI is soaring. Why else does Porsche have the highest profit margins in the car industry when the Cayenne is so nasty looking?

Nanjing for example have allegedly signed up 300 dealers in the USA already, and they haven't even sold a single car there yet. How many dealers does Cherry have there so far?

In addition do you really think that a British buyer will pop down his local Brilliance dealer whilst over looking a 'British Brand' which makes a similar for the same price? Have you never thought that people buy cars with one eye on residuals? Residuals on an established brand are less of a gamble than on an unestablised one.

I'm not saying you can't create a new brand I'm just saying it takes, more money, more time and more effort to do so and therefore the risks are greater.
 

·
Registered
Joined
·
176 Posts
BringIt said:
Guess what, Ford is also below average. So is Dodge. Yet they still sell.

What does that tell ya? ...

You're kidding, right?

It tells me they have the name "Ford" and "Dodge"

Thanks for lobbing that softball so I could slam it out of the park for ya...
 

·
Registered
Joined
·
37 Posts
To be honest I don't see why Chinese car makers are so eager to enter the US market. China is now the second biggest market and will become the largest in 10 years or so. Why not conquer there own market first, where most costomers are first time buyers. That way they have the advantage of an even playing field against brand recongniton. Also, its going to be much harder for them to enter the US or European markets. This isnt the 1950s, saftey regulations, emission regulations, and quality expectations are MUCH stricter than when Toyota or even Hyundia entered the US market. And with good quality used cars, it simply isn't reasonable to enter the market with a cheap (and low quality) car. Even worse, factories have become so automated that labor costs are only a small factor in car costs. So I'm afraid Chinese car makers are going to really struggle to get into the US Euro or Japanese markets. But with 1.3 Billion people, I don't see why thats a problem right now.
 

·
Registered
Joined
·
772 Posts
To be honest I don't see why Chinese car makers are so eager to enter the US market.
The bragging right at home.

It is not the issue of how many Chinese venders actually manage to sell in developed markets, but the issue of bragging to Chinese consumers that their cars are supposedly good enough to be sold in the US.

China is now the second biggest market and will become the largest in 10 years or so. Why not conquer there own market first, where most costomers are first time buyers.
Foreigners have a firm grip on mid to upper-level Chinese market. Chinese only get to claim the scrap of market that foreigners don't want, namely sub 80,000 yuan low-priced car markets.

Also, its going to be much harder for them to enter the US or European markets.
This is a fact that escapes the mind of our Chinese friends here.

But with 1.3 Billion people, I don't see why thats a problem right now.
Exactly. Chinese should focus on gaining domestic market shares first for the next decade. Anything that sells poorly in China won't sell good outside of China either.
 

·
Registered
Joined
·
507 Posts
Discussion Starter #14
Rock-N-Roll said:
You're kidding, right?

It tells me they have the name "Ford" and "Dodge"

Thanks for lobbing that softball so I could slam it out of the park for ya...
Are you dense?

You were talking about how QUALITY is the #1 concern, and I replied that Ford and Dodge are below average in quality surveys yet they still sell, so OBVIOUSLY quality is not that important a factor to a lot of consumers. (Ford/Dodge more likely sell on loyalty, design, network, etc. etc.)

Got it? (We're playing basketball by the way... ;) )
 

·
Registered
Joined
·
507 Posts
Discussion Starter #15
Why should Chinese cars go overseas and into the US? Many of you nay-sayers stated the reasons yourselves.

1) Bragging rights. Yes, in order to sell domestically, they'd have to say they can sell in the US, so Chinese consumers would trust their products.

2) Domestic market dominated by foreign makers, esp mid to high end. Yes, even more reasons to go overseas. See #1 above. Also, once the low end of the market is saturated in China, where do they expand? Why not dominate the low end market of the entire world, including the US?

3) The experience in the US market would help them in all other markets, even at home.

Though I'd caution that it can't be a huge money losing effort. It has to be profitable long term.
 
1 - 15 of 15 Posts
Top